M Commerce - An Introduction

In recent decade, we have witnessed e-commerce adoption and diffusion both in B2B and B2C contexts. Consequently, this acceptance has resulted in significant progress in strategies, requirements, and development of e-commerce applications and services. However, almost all e-commerce applications are based on wired infrastructure. This limitation, therefore, leads to the expectation of more portability and flexibility for facilitating business transactions. Hence, this leads to the emergence of mobile commerce (m-commerce) supported by advancement in wireless technologies.

M-commerce can be defined as the conduct of business supported by wireless technologies. The most significant advantage that m-commerce offer is the portability that facilitate customers doing business transactions and using services regardless of their physical locations. Studies found that mobile devices, namely mobile phones were one of the most quickly adopted consumer products (de Haan 2000). Currently, more than 800 million mobile phones and other mobile devices are in use worldwide.
The worldwide numbers are projected to rise to 1 billion soon, thereby exceeding the combined total of all computing devices (Vetter and Varshney 2002). Meanwhile, the mobile telecommunication networks, such as General Packet Radio Service (GPRS, Commonly referred to as 2.5G), Enhanced Data Rates for Global Evolution (EDGE, Commonly referred to as 2.75G), Code Division Multiple Access 2000-EVDO (CDMA2000-EVDO, Commonly referred to as one type of 3G) and Wideband Code Division Multiple Access (WCDMA, Commonly referred to as one type of 3G) (http://www.itu.int) have been developed rapidly. Countries that lack of regular telecommunication infrastructure are likely to adopt wireless and mobile communications to serve both urban and rural areas. Statistics indicate a rapid increase in mobile subscribers: from 2 billion in 2005 to approximately 3.3 billion by 2010 (Tilak, 2006). A study by the Wireless Data and Computing Service of Strategy Analytics predicted that transactions via mobile devices generate about $14 billion per year (Vetter and Varshney, 2002). This data implies the growing importance of mobile technology and applications in addition to the existing applications and services, including SMS and billing. It also suggests ample business opportunities and potential revenues in m-commerce.

To capture this opportunity, it is important for the industry to deploy effective business models and understand the drivers and inhibitors of m-commerce adoption. Hence, the purpose of our study is to examine the existing m-commerce business models and identify factors that influence the adoption of m-commerce. This paper discusses the advantages and disadvantages of existing business models. Furthermore, the paper also presents four important factors affecting the m-commerce adoption.