Study: Mobile commerce loses luster

Throw mobile commerce into the growing heap of overhyped and underperforming technologies. Less than 1 percent of respondents to a worldwide survey of mobile users actually made purchases with their cell phones in the past year.

Consulting firm A.T. Kearney surveyed more than 1,600 mobile-phone users in the U.S., Europe and Asia in January and found that only 12 percent said they intend to engage in mobile-commerce transactions, down sharply from 32 percent a year ago.

Mobile commerce took an even heavier beating in the U.S., where only 3 percent of respondents said they intended to use cell phones to make a purchase over the Internet, down from 34 percent a year ago, according to the A.T. Kearney survey report, "A Rude Awakening for WAP Dreamers".

The Cellular Telecommunications & Internet Association of Washington estimates there are 115 million cellular telephone subscribers in the U.S.

The study, conducted by A.T. Kearney in cooperation with the Judge Institute at Cambridge University in England, attributed slow adoption of mobile commerce to the still voice-centric nature of the mobile-phone industry. The study noted that only 16 percent of the handsets available last January had Internet-ready Wireless Application Protocol (WAP) and that the penetration rate may have increased to 70 percent today as carriers and users upgrade. The study noted further that users were still turned off by slow connection speeds of 9.6K bit/sec. (compared with the 56K bit/sec. for a dial-up connection) and a lack of comfort and ease of use.

The majority of mobile-phone users have "a general lack of interest or perceived need to use their handsets for anything other than making phone calls. ... Most people have not come to the WAP system because they have not been persuaded that the journey is worthwhile," the report said.

Charles Coates, a London-based A.T. Kearney consultant, said, "The study shows that most consumers are not yet ready to make Internet purchases with their mobile phones. While significant investment is being made throughout the world to bring mobile data services to the marketplace, consumer acceptance is lagging dramatically. To date, the promise of mobile commerce has not been embedded in the buying habits of consumers."

Clay Owen, a spokesman for Cingular Wireless in Atlanta, said one of the problems with mobile commerce in the U.S. is that "the industry oversold it two years ago," with consumer use failing to match the hype. Owen added that Cingular remains a believer in mobile data and mobile commerce.

"We are going to have a browser in every mobile phone by the end of the year ... and we're in the middle of upgrading our GSM [Global System for Mobile Communication] network to 128K bit/sec." These two key moves should help build the market for wireless data services and mobile commerce, Owen said.

The study agreed that faster speeds and wider use of data handsets should help boost mobile data and mobile commerce. The survey, A.T. Kearney said, did "provide a few grounds for optimism. ... More people are becoming used to e-commerce (if not yet with mobile commerce) and the number of uses to which mobile handsets are being routinely put is rising, particularly among WAP users, indicating that people are starting to see their mobile handsets as more than mere telephones."

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