Preparation is key to e-success

Mobile ecommerce presents a wealth of opportunities for content and service providers, but many of them are unprepared for the challenge.

While new entrants may not be the best prepared, they will be positioned to grab an early lead, shape the market and establish industry standards, according to the Mobile ecommerce: Markets Strategies report published by Ovum last week.

"The combination of enormous potential and uncertain revenues gives the feeling of a new gold rush, with hordes of hopefuls heading into uncharted and unforgiving territory, many with minimal preparation," warned Duncan Brown, analyst at Ovum and author of the report.

"Players offering applications must be clear that substitutes exist at all points and work out why their offering is attractive," he added.

Ovum predicts that mobile devices able to access the internet will exceed the number of PCs by 2003 at the latest.

Ovum says mobile ecommerce is the extension of the web beyond the static terminal of the PC or TV, using the public mobile network for information access and transactions.

Mobile ecommerce will be important to a wide range of industries including telecoms, IT, finance, retail and the media, as well as end users, Brown reckons. Users will spend more than $200 billion (£126bn) worldwide on such services by 2005.

More than a billion mobile devices will be in use by 2003. Europe will lead the way, with 165 million users and $74bn in revenues by the end of 2005.

Asia-Pacific will follow with 129 million users and $56bn in revenues, with the US accounting for 110 million users generating $47bn in revenues.

Despite the huge revenue potential for businesses, there is also considerable uncertainty about the best approach to exploiting mobile communications technologies, Brown says.

In the short-term, systems integrators and software vendors will strike gold by providing the foundations of mobile ecommerce to the main players.

As the market matures, banks, merchants and content providers will be able to identify which services and products are popular with customers.

But the big challenge will be finding the applications that users will actually pay for.

Ovum says content providers will succeed if they fulfil the three C's: convenience, low cost and compulsion.

Brown warns that success "requires close partnerships between a series of players to make the application work", because no single organisation has all the skills and resources needed to deliver the end-to-end experience.

Reporting: vnunet.com

See also:

Ecommerce: where there's a will, there's a way

Although three out of four adults in the UK now use the internet in some shape or form, very few actually take the plunge and buy goods online. Julian Patterson looks at why ecommerce is not taking off in Europe as quickly as might be expected.  12 Jul 2000

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