Ecommerce on the move

Wap has promised a lot, yet delivered relatively little. If the advertising is to be believed, Wap phone users can surf the web and connect to a multitude of different web-based services. The reality is often somewhat different. But now a new selling point has emerged - that of mobile ecommerce services, or m-commerce for short.

The Wap Forum, which represents all the major suppliers of Wap phones and services, paints the following picture of what will be possible: "Imagine stepping out of an office building to go to the airport. Using your Wap-enabled wireless device you check the traffic congestion and the train timetable and then purchase a train ticket online instead of driving. On the way to the airport, you select your aisle seat and check in for the flight reserving a special meal, and then unpack your raincoat after looking up the weather conditions at your destination."

Sounds great. But here is what is actually available from this scenario at present via BT Cellnet's Genie Wap portal that was launched in January. "Currently, it is not possible to check traffic congestion," said the spokesman for Genie. "You can check train times, but no, you can't buy train tickets, although I don't think that's far away. You can buy an airline ticket via one of our partners, such as Lastminute.com or Thomas Cook, but you can't check in, reserve a seat or order a meal." And the weather? "There is weather news. But it's UK only," he said.

Things are slightly better in some areas with Mviva, the America Online/Carphone Warehouse mobile portal launched on 20 July. This has a link to CNN's weather service providing worldwide weather information, and you can book airline tickets via ebookers or Lastminute.

Some traffic congestion information is provided, but it is "limited", admitted an Mviva spokesperson, in that it covers only major motorways. "It is being developed," the spokesperson added. However, you can't book a train ticket or even look up train times via Mviva, although timetables will be available by the end of August, and you cannot check in for a flight or reserve a meal.

User backlash
This kind of gap between the hype and what is really available is beginning to alarm some in the industry. They are worried that once the first, enthusiastic Wap buyers realise the limited nature of existing services, which do not provide full access to the internet, but only to specially-developed, text-only online services, there could be a backlash. A negative response could hold up any further development of new Wap applications such as m-commerce services.

Stephen Wright, marketing manager at telecoms distributor Rocom, said sales of Wap handsets are relatively slow in the wake of an initial burst when they were bought by early adopters. "I suspect people are either not convinced by the services that are available or are confused by the Wap concept," he said.

Others remain confident that while the present level of Wap services is pretty weedy, this will not seriously harm future market growth. "If you don't have a Wap phone today, you're probably not missing much," admitted Mike Herman, chairman of the Global Mobile Commerce Forum. "But I firmly believe there is an absolutely huge market here. It may not be this year, it may not even be next year, but trading over portable devices, with the same functionality as over fixed devices, will develop."

And the market forecasters agree. Analysts Frost & Sullivan reckon that worldwide revenue from m-commerce was close to $2.98bn last year and will be worth $64bn by 2005. Forrester Research puts the figure even higher: it thinks worldwide m-commerce will be worth $200bn by 2005. Merrill Lynch estimates that the European mobile portal market will be worth £14bn by 2005 and £63bn by 2010.

These kinds of figures are seriously tempting for internet content providers and mobile network operators, both of which are putting a lot of investment into Wap services. In particular, the UK's four existing mobile phone network operators are racing to hook users into their own services before the market opens up. Cellnet was the first with Genie, but Orange and Vodafone both now have mobile portals and deals with a number of content providers.

As yet, no commercial Wap service is available from One2One, but the company is advertising for developers to work on its mobile internet services and says it is investing £2m a day to ensure a "winning position" in the world of m-commerce. Other recently launched independent mobile portals include iTouch, which is run by Independent News & Media, and the previously mentioned Mviva portal from Carphone Warehouse and AOL.

What's available?
The main services available from these portals at the moment are fairly standard fare: email, entertainment listings, sports, travel, news, weather, share prices, and some shopping and money services. As yet, there are far fewer true m-commerce applications, such as the ability to buy and sell online.

One issue that will certainly need to be addressed before m-commerce can take off is security, something in which Herman is involved in a commercial capacity as vice president of security firm Thyron, which has developed a concept called the YES.wallet to help speed up transactions over Wap devices (see box below).

But there are also technical limitations at both the front and back ends of mobile online services. There are obvious problems trying to carry out complex transactions via the small screen of a mobile phone or even a personal digital assistant (PDA).

Richard Schwartz, senior vice president of technology at software company Vignette, which is working with a number of content providers on adapting their ecommerce applications for the mobile market, said that mobile users are, by definition, usually doing something else and concentrate on their phone for no more than about 10 seconds. This is a huge difference from the average desktop browsing time of anything up to an hour and a half.

"The challenge is to develop applications that present themselves, require an absolute minimal level of keystrokes and scrolling, and return the awaited result or complete the transaction," said Schwartz, adding that what customers need is a smarter generation of device-savvy ebusiness applications.

Sluggish data transfer rates over existing networks are also slowing up mobile internet use, and even the high street dealers, keen to shift Wap handsets, emphasise that while the launch of general packet radio services later this year will improve the speed of the current networks, the really big breakthrough will come with the launch of the third-generation mobile network in two or three years' time. According to dealer DX, when this arrives "you will be able to access all sorts of goodies from your phone, such as video and TV, and surf the internet just like from your PC".

At the back end, too, while standardisation on Wap formats has provided a substantial boost in mobile online services, there are still problems for content providers in having to convert internet information from HTML into wireless markup language (WML). WML has been developed to provide easy navigation without a full keyboard and has the ability to adapt screen displays for a range of mobile devices, from the smallest of two-line text displays to full graphic screens on larger PDAs.

Personal services
Schwartz says that online content on mobile devices will only really take off when it is better adapted to these kinds of limitations. He believes that one way this will happen is through far more personalised services. Online auctions, for instance, could benefit from this approach. A user could bid for an item while surfing from their desktop PC, but might then receive notification via their mobile device that they had been outbidded, and would automatically be reconnected to the auction site to make a higher bid.

But these kinds of personalised services are some way off for mobile devices. It will require a great deal more investment on the part of the infrastructure providers, the handset manufacturers and the application providers in order to realise the full potential of m-commerce services.

The amount of money now being poured into both developing and advertising mobile services indicates the level of interest among network operators in getting a toehold in the mobile internet market. Just don't buy a Wap phone tomorrow and expect to be able to access your local restaurant on the way home.

For that, as for many other services right now, the mobile phone is still best at its original, old-fashioned job: enabling consumers to ring up and place an order. There may be some small business opportunities, however, in providing local information services that give out the relevant phone numbers.