A Primer on Assessing Mobile Commerce

1. Mobile Commerce: A Good Candidate for Technology Assessment

Within the next five years, mobile internet is expected to overtake fixed (i.e. desktop-based) internet. This trend is expected to significantly impact both consumer- and company-behavior world-wide. As more and more consumers connect to the internet via mobile devices, a significant portion of commercial transactions currently conducted through fixed internet is expected to shift to mobile internet. Furthermore, it is expected that consumers who currently do not engage in commercial transactions over the internet will be encourage to do so over mobile internet because of a variety of reasons including the availability of easy-to-use and more secure payment systems in mobile devices, the smaller price tags of contents in mobile devices and the fact many mobile devices are considered as “walled gardens” i.e. it is significantly more difficult get pirated content into such proprietary devices. In short, along with mobile internet, mobile commerce is expected to rapidly expand within the next five years.

With the emergence of mobile commerce, a technology that is expected to revolutionize how commercial transactions are done, it is important for various stakeholders like the Philippine government, local industry players, consumers and academic institutions to have a comprehensive and systematic understanding of mobile commerce, the various trends, issues, key driving forces and critical uncertainties that will influence its evolution and diffusion (in the world and in Philippines in particular) and its impact on society (including “the impacts that are unintended, indirect and delayed”) in order for them to make strategic decisions that will allow them to take advantage of the opportunities and prepare for the risks that will come with the technology.

2. An Outline of a Comprehensive Technology Assessment

To effectively and comprehensively assess a technology, it is imperative to have at least a general understanding of the technical aspects of the technology. In order words, it is important to be familiar with the technology’s physical morphology (i.e. the technology’s components, their interactions and their integration as a working system) and functional capabilities (i.e. the technology’s functions and performance – what the technology does and how well does it do what it does.) Therefore, the acquisition of this general understanding and familiarity is an essential first step in assessing a particular technology such as mobile commerce.

It is also important to know how the technology is related to and interacts with other technologies. Thus, it is important to look at the bigger picture i.e. the larger technological system where this particular technology is situated in, not only spatially but also temporally. By looking at the bigger picture, the assessor will become aware not only of the technological ecosystem i.e. web of interacting and mutually influencing technologies where the particular technology is a part of but also the family of related technologies where the particular technology is descended from and future technologies where it could evolve to. Furthermore, with this bigger picture in mind, the evolution of the particular technology as a distinct technology as well as its trajectories gains a more substantial context. While historical analysis can be used to look back into the technology’s past, forecasting and foresighting techniques such as scenario planning and technology roadmapping can be used to look into its (possible/alternative) future(s) i.e. its evolution and diffusion.

Assessing a technology does not only involve looking at its technological aspects but also its place in (i.e. where is it and how is it influenced) and impact to a society’s innovation system, economic system and the society at large in the present as well as in the short-, med- and long-term future. Forecasting and foresighting techniques mentioned in the previous paragraph, including analytical tools utilized by those techniques such as environmental scanning (i.e. STEEP, POTS, etc,) can also be used for this purpose. Other sources of critical information include the academe, market, industry players, expert opinion, opinions, perceptions and expectations of lay people and concerned civil society groups.

Finally, a comprehensive assessment of a technology includes not only an assessment of its impact on its macro-environment but also on its micro-environment (i.e. in the industry and firm- levels.) For this purpose, analytical framework such as value-chain analysis, SWOT and Porter’s five forces can be utilized.

3. A Short Assessment of Mobile Commerce

1. Scope and Limitation

A comprehensive assessment of mobile commerce is outside the scope of this paper. Rather, this paper is limited to introducing various aspects of mobile commerce and bringing up specific points for further research and discussion.

2. Description of Mobile Commerce

Mobile commerce enables users to transact or conduct commerce using mobile devices such mobile phones, smart phones, tablets and PDAs that connect to computer networks including but not limited to the internet. Thus, it gives users a convenient, fast, secure, highly accessible and highly available alternative to traditional ways of conducting commerce (i.e. person-to-person and even desktop-based e-commerce.) Furthermore, since it is more streamlined and scalable, transaction costs are expected to be cheaper and pricing of products and services offered via mobile commerce are expected to be competitive.

3. Various Forms and Competing Designs

As an emerging technology, the dominant design for mobile commerce has not yet been fully established. Right now, mobile commerce has various forms and competing designs which are not necessarily mutually exclusive. These technologies can be classified into two classes: mobile device technologies and mobile communication technologies.

In the category of device categories, there are several hardware and software technologies like internet-capable mobile phones, smart phones (e.g. Apple’s iPhone, RIM’s BlackBerry, HTC’s Android-based Dream), tablets (e.g. Apple’s iPad, Samsung’s Galaxy), mobile-payment devices (e.g. Square’s Square, Motorala’s Snap-On), other mobile devices (e.g. Apple’s iPod Touch) and mobile applications (e.g. Google’s Google Wallet) that enable mobile commerce.

Underlying the various mobile device are various competing mobile communication technologies such as broadband technologies (e.g. WiMax, 3G, LTE) and short-range communication technologies (e.g. RFID, Bluetooth and Near field communication or NFC.)

In the local front, there are also existing forms of integrated mobile commerce solutions like Globe’s GCash and Smart’s SmartMoney utilizing their firm’s proprietary software and telecommunication infrastructure.

From this smorgasbord of technologies, it would be interesting to see how the mobile commerce industry will shape-up and evolve and which technologies would become dominant, which would be integrated,  which would establish strong niche-markets and which would lose out in relation to mobile commerce.

4. Related Technologies

Commerce is a fundamental human activity. It is therefore easy to see how mobile commerce is interlinked to other technologies such mobile banking, mobile content delivery, mobile advertising, social networking, (technologies related to) location-based services and many more. As such, it would also be interesting to analyze how these technologies would interact and influence each other’s evolution, adaption and diffusion.

5. Socio-Economic Impact and Issues

Mobile commerce is expected to affect consumer behavior, retail pricing, marketing orientation, relationship between consumer and provider of goods and services, legislation, policies, regulations and therefore, company strategies. It is expected to have pervasive impact on firms and organizations across industries including banks, content-providers, telecommunication companies, retail companies, other technology companies such software and hardware companies and governments.

It is, therefore, important to systematically analyze and assess the extent and magnitude of this expected impact along with potential unintended, indirect and delayed impact (i.e. will it cause the collapse of certain industries, will it have negative effects on the environment or community values, will it lead to even shorter attention spans and lower EQs, will it lead to a more commerce- / commodity- driven society, will it increase, rather than decrease, stress level among community members, will it lead to more privacy or security issues, etc.)

To do so, it is necessary to identify and understand key variables, critical uncertainties and driving forces directing the various issues surrounding mobile commerce.

6. Summary and Conclusion

Mobile Commerce is an emerging technology that is, by nature, both broad and complex. It is expected to revolutionize the way we conduct commerce and business as a whole. But more than that, it has the potential of altering society from its very core, altering its dynamics and changing our way of life in fundamental ways. It is, therefore, imperative for us as individuals and organizations to have a comprehensive and systematic understanding of mobile commerce, the various trends, issues, key driving forces and critical uncertainties that will influence its evolution and diffusion and its impact on society including those that are unintended, indirect and delayed in order to make strategic decisions that will enable us to better prepare to the risks and take advantage of the opportunities that accompanies the technology. To do so, it is necessary to conduct a thorough, effortful and in-depth study of the various aspects and complex issues surrounding mobile commerce as highlighted in the previous sections.