Mobile commerce - big or REALLY big?

Mobile commerce will be a success, but wildly different predictions from two leading researchers have left the market wondering exactly how successful it will be.

The two reports, one from IDC and the other from Forrester Research, put the value of transactions conducted on mobile phones in Europe at £25.6bn by 2004 and £3.2bn by 2005, respectively.

Wireless and mobile communications analyst Tim Sheedy, author of the IDC report, believes mobile commerce, or m-commerce, applications are the "killer applications of the mobile internet".

"Applications such as these are what's required to grow the market - as organisations begin to launch such services there will be a huge levels of growth in usage of mobile internet," he said.

IDC predicts that there will be more than 300 million mobile phone users by 2004.

However, Carsten Schmidt, an associate analyst with Forrester, believes PCs will dominate ecommerce and that the appeal of mobile phones will be limited.

"Pioneering European retailers have moved beyond the PC to offer Wap sites and interactive TV shops, but more than half of projects fail to meet expectations. Just because a retail sale is possible on a device doesn't make it probable," he said.

Forrester predicts that mobile phone transactions will make up just three per cent of online retail revenues by 2005. Personal digital assistants are given just 0.1 per cent of the market revenue.

The research firm said mobile phones only favour transactions that are timely, simple and location-based, and that PCs will dominate ecommerce, capturing more than 80 per cent of the online market. The remaining 16 per cent is attributed to sales generated through interactive TV shopping.

All of which leaves UK businesses planning ecommerce strategies in something of a quandary of what to do about m-commerce. However, UK companies do not seem too worried just yet.

A spokesman for eCentreUK, the most cutting edge of the trade associations in the five-strong Alliance for Electronic Business, told vnunet.com that m-commerce "isn't something we're really studying yet, although we do plan to in the future. Our members are still coming to terms with ecommerce."