M-Commerce Value Chain

1
M-Commerce Value Chain

• Nour El Kadri
• University Of Ottawa

2
Business Partnerships

• Content providers
• Wireless Application Service Providers
• Mobile Network Operators
• Infrastructure Equipment vendors
• Software vendors

• Mobile Portals
• Content Aggregators
• Third-party billing providers
• Mobile Device Manufacturers
• Location Information Brokers

3
Infrastructure Equipment Vendors

• Equipment vendors provide
• Base Stations
• Mobile Switching Systems
• Wireless Transmission Solutions for both Data and
  Voice
• 50 Billion Market in 2000
• 100 Billion in 2005
• They are major stakeholders in the m-Commerce
  market.

4
Software Equipment Vendors

• They play a critical role in
• Third Generation Partnership Forums (3GPP)
• Wireless Application Protocol (WAP)
• Mobile electronic Transaction (MeT)
• Location Interoperability Forum (LIF)

5
Software Vendors

• Suppliers of
• Operating Systems
• Databases
• Microbrowsers
• Other middleware technologies
• Major Operating Systems
• EPOC, by the Symbian Consortium (Psion,
  Mstsushita, Ericsson, Nokia, Motorola)
• Windows CE, by Microsoft
• PalmOS, runs on 60 of all PDAs (2004)

6
Microbrowsers Databases

• Microbrowsers
• Openwave (Phone.com)
• Microsoft, Nokia, Ericsson
• 4thPass has a Java-enabled microbrowser
• Databases
• iAnywhere Solutions, subsidiary of Sybase
• Oracle
• IBM
• Most of these key players rely on the business
  model that combine licensing, consulting and
  maintenance fees.

7
Content Providers

• Content can be
• News
• Directory services
• Directions
• Shopping and ticketing services
• Entertainment Services
• Financial Services

• Sources of Revenue
• Subscription fees
• Transaction fees
• Share of traffic charges
• Sponsorships, advertising, referral fees,
  commissions.

8
Business Models

• User Fee Business Models (subscription and usage
  fees)
• Shopping Business Models
• Marketing Business Models
• Improved Efficiency Business Models
• Advertising Business Models
• Revenue-Sharing Business Models

9
User Fee Business Models

• Subscription Fees
• i-Mode model rely on DoCoMo to collect fees
• Ex Bandai and its Chara-Pa service, 1.6 million
  subscribers by 2000.
• Usage Fees
• Charge for actual usage of a service
• More difficult for small providers to implement
  on their own due to small charge fees ? rely on
  mobile operators, mobile portals and third party
  micro-billing operators

10
Shopping Business Models

• Like wired e-tailerswireless is a new
  distribution channel
• Nokia, Nordia and Visacooperating to make full
  transactions

11
Marketing Business Models

• Mobile presence is subsidized companys core
  business
• Buying and selling cars, heavy equipment
• Promoting programs of a university
• Tsutaya for video and CD rentals
• In 2000, 650,000 users
• 2 million accesses per week
• Privacy laws and anti-spamming legislation
  protect customersif implemented!

12
Improved Efficiency Models

• Cutting cost and improving customer satisfaction
• Mobile banking
• Mobile trading
• Mobile ticketing
• Disintermediationremoving extra channels
• Daiwa Securities in Japan
• 35 of stock trading on the internet
• 20 using the i-mode mobile system
• Mobile transactions were 50 cheaper than
  traditional ones
• Boosting company productivity through mobile
  access

13
Advertising Business Models

• Flat Fees
• Charge flat fee for displaying advertisement over
  a period of time
• Traffic-based Fees
• Paying based on the number of times an
  advertisement is placed
• Performance-based Fees
• Fees based on the number of click-throughs or
  call-throughs

14
Revenue Sharing Business Models

• Partnership arrangements with other companies
• Collecting payment from user and distributing it
• Webraska
• Driving maps with real time reporting
• Revenue sharing with Trafficmaster and Orange,
  M1, and voice stream.

15
Content Aggregators

• Value Creation by assembling content from various
  sources
• BuzzCity in Singapore aggregates, repurposes and
  WAP-enable local, national and international
  content
• Redistributed by mobile operators
• Telenor in Norway
• Digi in Malaysia
• TotalAccess in Thailand
• Mobile portals, network operators and many ASPs
  operate as content aggregators

16
Mobile Network Operators

• MNOs ?Mobile Voice Carrier
• Mobile Content Provider
• Mobile portal
• Mobile ISP
• Mobile Location Broker
• Mobile Transaction Provider

17
MNOs Challenges

• Biggest threat comes from other competing
  players
• Virtual Mobile Network Operators (VMNOs)
• Do not own spectrum, but buy bandwidth from MNOs
  for resale
• Mobile portals
• MNOs have portals but feel the heat of
  traditional Portals with mobile presence
• Third-party Billing Providers
• Banks, Credit Card Companies, billing providers

18
Mobile Portals

• Offer a one-stop shop solution to mobile users
• Market close to 10 billion per year (2005)
• In 2001 more than 200 portals launched in Europe
  alone.
• Revenues come from different streams
• To compete a portal needs to offer
• Ease of use, personalization, a critical mass of
  services and applications - all at a reasonable
  price

19
Mobile portals

• Players fall into different categories
• Mobile Operators
• NTT DoCoMo
• Traditional Internet Portals
• AOL, Yahoo!, MSN, Lycos, Excite
• Strategy to offer single integrated portal
  solution
• Mass Media Companies
• Vivandi Universal Vizzavi portal in cooperation
  with Vodafone
• Device Manufacturers
• Palm and Nokia through MyPalm and Club Nokia
• Independent Mobile Portals
• Halebop, djuice, Mviva, iobox bought by Terra
  Mobile
• Financial Organizations
• Nordea specialized WAP portals for shopping and
  banking

20
Third Party Billing and Payment Providers

• Early versions of WAP and i-Mode did not provide
  end-to-end security. This resulted in content
  providers depending on MNOs and third-party
  providers for billing.
• Pre-paid cards
• Variations of mobile wallet by bankc to counter
  Mobile operators
• Other initiatives include
• MeT, Mobile electronic Transaction
• Mobey forum, the Mobile Forum
• Global Mobile Commerce Interoperability Group

21
Mobile Device Manufacturers

• Their design decisions determine the
  functionality and standards available on mobile
  platforms
• CPU speed and memory capacity
• OS
• Communication standards supported GPRS, WCDMA
• Microbrowser pre-installed
• SIM, WIM, certificate-based authentication,
• Location tracking functionality
• Applications, MP3, Videostreaming,

22
Wireless Application Service Providers

• Application Development
• Hosting and Managing the application
• Developing the wireless bridge
• Hosting and managing the wireless bridge

23
Location Information Brokers

• Responsible for determining and updating users
  position
• Supplying information to content providers,
  mobile portals,.
• Driven by location sensitive applications,
  regulations like E-911 in the US
• Players
• Cambridge Positioning Systems
• Cell-Loc over AMPS and CDMA