Europe Ahead of the Pack in Wireless Game

SAN MATEO (06/01/2000) - Beyond U.S. borders, wireless technology is rapidly redefining how e-commerce is being conducted, and the smarter industry players are already gearing up to change their content-delivery strategy to address it.

"Our strategy for wireless is predicated on what customers want," says Mike Durand, a representative of financial services provider Charles Schwab & Co., in San Francisco. "The fact is, the way people overseas will be accessing [our site] in the future is through wireless."

On June 5, Schwab will launch a global trading service built around the first wireless version of its e-commerce site, called PocketBroker, which will be accessible on WAP (Wireless Application Protocol)-enabled L.M. Ericsson Telephone Co. phones. The service will give Hong Kong traders, for example, the ability to buy and sell stocks listed on the Hong Kong Stock Exchange provide real-time confirmations and quotes, and allow customers to check their balances and positions.

In 1997, Schwab had about $7 billion in assets under management outside of the United States; today that number has reached $94 billion. The PocketBroker trading service is Schwab's declaration that wireless is the key to future success around the world.

According to most industry experts, once wireless is accepted as the foundation of any global e-commerce effort, the building blocks sitting atop that foundation will include local partnerships with service providers, handset manufacturers, and, in some cases, with the company that offers a leading portal site.

"In Japan, it is clear that NTT DoCoMo Inc. and its iMode phone is a major force, and the majority of e-commerce sites are scrambling to get on their main menu," says Charlie Baxter, CEO of San Francisco-based eTranslate Inc., a leading advisor on global e-commerce strategies.

The numbers back up Baxter's perception. By the end of May, approximately 10 million consumers will be accessing Web sites via the NTT DoCoMo iMode phone, according to published reports. According to the China News Agency, half of the 65 million people worldwide who use the Internet will access it through cell phones by 2003.

The popularity of wireless access is further demonstrated in Italy, where PC penetration is lower than in almost any other European country but cell phone users have one of the highest penetrations. Baxter says that Italians will go right to their cell phones to order a movie, adding that misunderstanding the wireless access model will negatively impact a company's entry into a new locale.

The United States still does the largest volume of business via the Internet, but "the tail is going to wag the dog," Baxter says, if companies don't catch up with what's happening worldwide.

To do this, companies should re-evaluate their e-commerce strategies, says Dave Lawson, CTO of eTranslate. "Companies need to do a technology audit," Lawson says.

Lawson says that companies should not get locked in to technology that doesn't scale globally, such as search engines tied to the English language, ASCII-only databases, or computer languages that cannot handle the double-byte character sets of many Asian languages. Language, of course, must be local, but an e-commerce site that is going to appear on a screen smaller than 3 inches must consider other factors.

"If you take a Web page with, say, 250 words, then reduce that to 20 words so that it fits on a cell phone display, and then translate those 20 words to another language, you lose information, and in losing information you lose meaning," Lawson says.

According to Lawson, the first winners will be companies that offer content that people want urgently and immediately. The three fastest-moving areas for e-commerce over cell phones -- banking, travel, and retail -- fit Lawson's description, say IBM Corp. representatives responsible for planning the company's e-commerce strategy. IBM, for example, is putting mobile banking services online at the rate of a bank per month, according to Jon Prial, director of marketing at IBM's Pervasive Computing division.

Although Charles Schwab has its plans to become a global broker, Prial warns that European banks -- the latest including Bank of Scotland, Spain's Bankinter, and Scandinavia's largest bank, Handeslbanken -- have their own plans that go well beyond letting their customers know how much money is left in their checking account.

As e-commerce strategists look worldwide to Africa, China, India, Pakistan, South America, and Europe, the first consideration must be what is the predominate wireless data network available and the devices they use, says James Pouliopoulos, senior marketing manager at Lotus Development Corp.'s Mobile Communications Group, in Cambridge, Massachusetts.

It is clear to people such as eTranslate's Baxter that it is not just the landscape for data delivery that is changing, but also who is in control of the profit structure. Although NTT DoCoMo is clearly the winning portal provider in Japan, the European market remains wide open.

"Yahoo Inc. is an important player," Baxter says. "But do they own the Nokia phone user in Europe?"

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