mCommerce – less big bang, more whimper

2000-09-08

It would be dangerous to say that analyst firms make things up, but of two reports just out, one must be wrong. The first, from Forrester Research, puts the value of mobile transactions at £3.2 billion by 2005. The second, from IDC, says it’ll be £25 billion by 2004. If we’re not mistaken that’s a factor of ten.

It has to be said that neither figure is particularly small. The smallest percentage of Forrester’s estimated figure would still be a worthy addition to the revenues of any company. All the same, it is not enough to send businesses into a panic in the same way as, say, eCommerce has done. From Forrester’s point of view, the figure represents a mere 3% of online retail revenues – let’s face it, most businesses are still trying to get their heads round how they can get a slice of the other £95 billion. Even given IDC’s more inflated figure, mCommerce is still the icing but eBusiness is very much the cake.

Much would appear to depend on the form factor of tomorrow’s mobile devices. Mobile phones are small, neat and almost impossible to do anything with, other than make phone calls. Given this, mCommerce transactions need to be as easy and quick to perform as tapping in a phone number and saying “I’d like to order a pizza, please.” There are some obvious wins for mCommerce, for example online betting at crowded sports events. However many currently touted applications for mobile devices are deep pan pie in the sky – Robbie Coltrane may want to check his bank balance from his hotel room, but I can’t see the need myself.

The hype around mCommerce is exactly that – hype. Fortunately it appears that the bubble is bursting well in advance of it doing any serious damage. There can be no denying that location-sensitive services will become a reality and our fast-paced city dwellers will no doubt decide that the world is a better place for them. However this is the stuff of the future, and even then will not have a serious impact on the online transaction count. Here’s a simple exercise – list all the things you might need to buy when on one place, compared to all the things you might buy going from one place to another. One list is big and the other is small, right? QED.

Things will be different in ten years’ time, when UMTS broadband access is available to mobile devices. By that time it will be questionable whether most punters will know, or care, whether a given transaction is taking place from a land-based or a wireless connection. In the short term, the additional functionality being built into mobile phones will sit, and wait, until its users determine a real use for it.

(First published 8 September 2000)