A lesson we learned from the bust of dot-com bubbles is that a cool technology itself does not automatically translate into business success. Successful business models leverage new technology to create values and profits from ultimate customer satisfaction. So, what new values or cost savings can mobile technology create?

Unlike the PC-centric electronic commerce, mobile commerce is focused on personal experiences. A person carries a pervasive mobile device and gets information anytime, anywhere, from anyone. For the first time in history, a person's information access can be disassociated from her environment. For example, a traveler does not need to be in her office at a specific time to get ticket information. That unprecedented freedom of information could fundamentally affect all business categories. The next several sections provide a brief overview with examples.

From a consumer's perspective, mobile commerce provides extreme convenience, speed, and personalization to access information services. Let's use a hypothetical stock trader example to illustrate how mobile commerce can change the way we consume information. A mobile stock trader can access markets around the world anytime, anywhere. He can take advantage of the 24/7 continuous global markets and never miss any profit opportunities. Mobile services store the trader's portfolio and target price information. Relevant news and price alerts are pushed to the trader at real time regardless of his location. Using personalized smart mobile agents, the trader can focus on stock researches and use his time more efficiently. As a result, he now spends more time with his family and enjoys life. In this case, mobile commerce creates value by saving time, improving efficiency, reducing opportunity loss, and improving the quality of life for its consumer. In fact, the financial services industry has been a major adopter of mobile commerce technologies. Almost all major banks, credit card companies, and trading firms have offered mobile interfaces to their informational and even transactional services. According to IDC, mobile banking has grown tenfold in western Europe from 1999 to 2001 and is expected to reach $334 million during 2003 in western Europe alone.

In addition to improving existing services, the freedom of information enables new breeds of consumer information services. For example, with smart in-home monitoring devices, patients may now stay with their families instead of in hospital observation rooms. Phase Forward is one of many firms in this emerging market. Another example is customized marketing application. Marketing firms can take advantage of the human desire for instant gratification and design more effective product promotion schemes based on consumers' real-time experiences. Avantgo is a leading company that provides mobile marketing solutions. Those new applications improve our lives directly and represent huge opportunities of profits for mobile commerce firms.

From a business's perspective, mobile commerce could create value by improving efficiency. A good example is mobile supply chain management. Today's business supply chains consist of multiple suppliers and sellers at multiple levels from multiple countries. A poorly managed supply chain can create redundant inventories or insufficient supplies (and hence market share losses). In highly competitive business sectors, such as the PC business, efficient supply chain management can determine the survival of a firm. PC business leader Dell excels in supply chain management. As a result, Dell can make profits even when competitors are taking huge losses.

In a mobile supply chain management system, warehouse workers and truck loaders use mobile devices to track inventory and shipment data. The data is uploaded into enterprise backend systems at real time. Managers make timely decisions based on the most up-to-date supply chain information. Real-time information also allows the management team to quickly identify and correct bottlenecks in supply chains. Purchase authorization, billing, and payment are also completed by field agents at real time, streamlining the whole process and reducing turnaround time for both goods and information. Supply chain management innovation is often custom done inhouse. A commercial product that enables real-time supply chain management using mobile technology is Savi Technology's Smart Chain solution.

Better managed and more transparent supply chains can ultimately benefit a business's bottom line by increasing customer satisfaction at the end of the supply chain. Mobile technology enables vendors to ship goods faster and to better predict the availability or arrival dates. UPS and FedEx's package-tracking services have became hugely popular. In a world of mobile commerce, real-time order tracking would be the norm of retail business. Highly visible supply chains allow customers to adjust their schedules to meet the product delivery time.

Mobile commerce allows firms to reduce operational costs for their mobile employees, including sales force, field agents, and factory floor workers.

Pharmaceutical companies rely on physicians to sell new medicines. Pharmaceutical sales representatives and doctors often meet at lunchtime outside of the doctor's office—it is easier to make personal connections during an informal lunch. However, it is difficult to hook up a networked computer on a dining table. If the doctor wants to make a purchase, the sales representative has to come back later with price and inventory quotes— lengthy and costly process. Companies like AvantGo and XcelleNet develop mobile sales management and automation suites for big pharmaceutical companies. With the help of mobile commerce, the salesperson can quote prices and close the deal right on the dining table, and the doctor can then track the shipment. Of course, mobile sales automation can go far beyond the pharmaceutical industry. Combined with leading CRM (customer relationship management) software, companies of all sizes, such as IBM, NexTel, SAP, and Numeric Computer Systems, offer a range of mobile sales solutions.

Like sales representatives, field agents also need to access their company's enterprise information system on the run. Endurable equipment vendors from Xerox to Otis equip their field service technicians with mobile devices. They can check technical information as well as conduct asset management on customer sites.

Even for factory workers who do not work outside the company, mobile information access can still be very useful. Boeing has huge plants to build commercial jet airliners. It is impossible to wire the plant with Ethernet cables, since there are so many moving parts. Technicians working inside a plane often need to make little trips to a nearby computer terminal to check digital blueprints. That is not only inefficient but also error prone—humans can recall wrong details even after a short walk. Mobile information devices make it possible for technicians to check blueprints inside the plane right at the problem spot, improving efficiency, reducing error, and hence saving operational costs.

Government sectors are among the first to adopt sophisticated mobile applications. Police officers need to check driver's license, license plate, and vehicle identification numbers whenever they stop a driver. Emergency medical workers at an accident scene need to check drug conflicts and other life-critical information, and emergency response systems have to be coordinated wirelessly. The military requires real-time updates from soldiers and commanders in the battlefield.

The events of September 11, 2001, in the United States revealed successes and failures in government mobile information systems. When all the fixed-voice and data lines were knocked off by the terrorist attacks, the cell network was still functional. Cell phone calls and wireless email messages became the last words we heard from many people in the World Trade Center and in the hijacked planes. However, the emergency response wireless networks proved fatally flawed.

Many firefighters in the Towers never received the evacuation orders. The information gathered by police helicopter pilots about the imminent danger of building collapse never reached the fire department information system. Reliable mobile information systems are crucial to public safety in the 21st century.

To take advantage of mobile commerce, businesses and consumers must adopt state-of-the-art mobile technology. The diffusion of innovations usually goes through five stages: visionary, missionary, ordinary, commodity, and maturity.
 

·         Visionary: The technology has just come out. Few people see its business value. The technology proponents in the visionary stage base their arguments on advocacy rather than on solid value propositions. A famous advocacy slogan is "You need this. You just do not know it yet." In this stage, few companies except infrastructure builders can make money.

·         Missionary: Business practitioners start to see the value of the innovation. Pioneer companies or employees become early adopters of the new technology and start to profit from it.

·         Ordinary: The value of the technology is well accepted by the main stream business executives, and most companies have developed plans to implement solutions based on the new technology. In this stage, the developers and enablers of the new technology make the bulk of profits.

·         Commodity: In this stage, the adoption of the technology becomes common practice. The technology has started to generate profits industrywide. However, since implementations have been standardized, the barrier of market entry becomes substantially lower, which results in intense competition in the enablers sector.

·         Maturity: In a mature market, most commodity technology suppliers are consolidated to a few dominant players.

On a typical innovation diffusion curve, the transition period between missionary and ordinary stages are associated with explosive growth of adoptions and a limited number of technology firms who have the expertise to implement viable solutions. The unbalanced demand and supply creates golden opportunities for developers and technology firms to make money. We have seen this pattern repeated throughout history.

At the time of writing (Fall 2003), the value of mobile commerce has been well accepted by industry leaders and business executives. Leading companies in financial services, information services, transportation, and manufacturing sectors have already started to implement their mobile commerce strategies. Other companies will soon follow suit. All these signs indicate that mobile commerce is currently at late missionary stage and is moving toward the ordinary stage.

Although mobile commerce poses to bring tremendous opportunities, we have to be cautious and understand the risks. Historically, technology adoption was never a smooth or linear process. As we have seen in the recent rise and fall of dotcoms, the expectations of technology adoption are often exaggerated; the relationships between the new and old business models are often distorted. Those unrealistic expectations have resulted in severe consequences for those failed dotcom companies and their employees. Nevertheless, adoption of e-commerce as a whole is steadily moving on. I expect the mobile commerce adoption will experience similar up and downs. Many of the heavily hyped, first-generation mobile companies may not ultimately survive. The final winners might still be steady and effectively managed blue chip companies.

The value of mobile commerce is ultimately realized through successful applications. A popular application can jump-start the technology adoption process and make a lot of profit for its inventor. The search for mobile "killer applications" has started from the beginning days of mobile commerce. In this section, we will discuss application ideas and trends.

The most mature consumer markets for mobile commerce are in the Asia-Pacific region and Northern/Western Europe. In those markets, mobile entertainment applications are hugely successful. A good example is Japan's DoCoMo. However, in the United States, mobile entertainment has yet to take off. U.S. consumers are less subject to crowded public transportation systems and have easy access to superior wired voice and data networks. The individualistic culture of the U.S. society makes community and messagingbased games less attractive to American consumers. Mobile entertainment might never be a killer application in the United States.

However, mobile entertainment represents only a small part of the consumer commerce. Mobile commerce's application is much broader than personal entertainment.

Although mobile entertainment can grow huge businesses, it provides nonessential toys to consumers. Enterprise mobile applications that enable essential business tools are more likely to be killer applications for future mobile commerce. For example, mobile games allow travelers to kill time when waiting in long lines in airports. In contrast, a mobile ticketing and scheduling application allows travelers to go directly to gates and avoid the lines altogether.

According to a study released by the IDC, the number of mobile workers in the United States will reach 105 million by year 2006. That is almost twothirds of the total U.S. work force. Those mobile workers perform complex and essential tasks. Their workflows must be fully integrated into the IT infrastructure through enterprise mobility solutions.

In reality, enterprise mobile applications are quickly gaining momentum, especially in the United States. Although the public wireless network in the United States is not as advanced as many Asian and European countries, U.S. companies have seen the value of enterprise mobile applications and have invested a lot of money to build high-speed corporate wireless networks using technologies such as WiFi. The leading mobile commerce applications in the United States are not games but business applications.

The mobile commerce revolution goes much deeper than a single killer application. It is about the freedom of information access. For example, mobile workers can access email and synchronize with calendar applications; securely read and write company files and databases; get price and inventory quotes from live application servers; and respond to customer service requests anytime, anywhere. Mobile enterprise applications change the ways consumers, employees, and companies conduct their businesses.

Enterprise mobility will become a driving force behind the mobile commerce revolution and form an eco-system nobody can live without. This collection of killer mobile business tools and applications provides great opportunities for businesses and developers.

The previous sections explained the rationales and values behind enterprise mobile applications. After a company develops a mobile strategy, the natural next step is to implement it. Given the complexity of a mobile commerce solution, it requires collaborations from many different application and infrastructure service providers. Mobile commerce provider firms can generate revenues from hardware, software, or services sales.

There is a wide range of mobile devices, including many kinds of cell phones, PDAs, consoles, and auto-mounted devices. Since mobile devices are to become pervasive personal belongings, they pose some unique design and technical challenges to manufacture. Successful mobile devices should have the following features.

·         Small size

·         Rich multimedia presentation capabilities

·         Fast response time

·         Large memory for data and applications

·         Long battery life

·         Fashionable and personalizable

Billions of dollars have been invested in mobile hardware research by leading companies such as Intel, Nokia, Motorola, and Qualcomm; they have produced many competing chipsets and handset designs.

Mobile commerce requires mobile devices to be connected to data networks. Mobile Internet Service Providers (MISPs) are often wireless network carriers such as SprintPCS and AT&T. Those carriers build radio towers across the country and buy expensive radio spectrum licenses. They provide national cell phone voice and data services and often bundle Internet services in wireless access packages. Companies can also partner with wireless carriers to provide mobile Internet access to their customers under their own brand name. An example of an independent MISP is Palm.net.

If your mobile application is internal to your company, you may not need a national MISP. You can set up your own local corporate wireless network. Provision stations around your building or campus connect your wireless network to your internal network and then connect to the general Internet through your company firewalls. This way, you act as your own MISP.

Given the diversity of mobile hardware, there are many mobile device operation systems. Examples include PalmOS, Symbian OS, Windows CE, and Embedded Linux. The OS SDKs (Software Developer Kits) often lack advanced programming language support and important libraries for business functions.

So, on top of operating systems, there are also application software platforms. Those platforms run on a variety of mobile devices and provide advanced sets of development tools and features. Examples of such platforms include WAP microbrowsers, Java, and Microsoft .NET Compact Framework. Java mobile application platform is one of the major focuses of this book.

Since mobile devices have very limited processing power and poor network connections, they often rely on backend servers to conduct sophisticated tasks. Mobile Application Service Providers (MASP) provide middleware and backend services. Examples of MASPs are 247 Solutions, JP Mobile, AGEA, Avantgo, and many others.

Companies looking for customized inhouse enterprise solutions can become their own MASPs. This book is targeted to MASP developers in both outsource and inhouse firms. We discuss mobile commerce-specific backend and middleware solutions in detail in the rest of this book.