Addressing M-Consumer Concerns

Addressing M-Consumer Concerns

Several companies positioned themselves to play a multifaceted role in this industry, thus creating an entirely new business landscape, where players often have overlapping roles. The mobile value chain becomes more intimate and dynamic, possibly with multiple interactions that do not necessarily preserve a sequential nature and where all market players need to contribute for the industry to reach an optimal level. Thus, a new m-commerce value network (Figure 3) was proposed by Coursaris and Hassanein (2002) that better captures the interactions between the various players in the industry. The mobile value network introduced is made up of customers, network operators, service providers, technology vendors, application developers, and content providers. Because of the multiple interdependencies among value network members, if any of these parties is underdeveloped (or even absent), then the entire network could potentially break down. In addition, each of the six parties identified in this new value network may be made up of additional subsets of companies with more specific business objectives; these possible subsets are identified next, where each value network member is discussed in further detail (Turban, 2002; Kalluvilayil, 2001; Kalakota, 2002; Buckingham, 2000):

• Customers: Customers may be the most important value network member, because in the absence of customer demand, there may be little, if any, need for any of the other players in the value network to be present. For example, if the wireless customer does not see the value in nonvoice mobile services made available by content providers (e.g., weather information), then there is little point in network operators maintaining network service (e.g., GPRS), technology vendors manufacturing wireless products (e.g., handsets), service providers offering wireless products and services (e.g., wireless network access), or developers formulating applications (e.g., wireless chat).

• Network operators: Arguably the second most significant party after the customer in the m-commerce value network is the network operator (or network carrier). Network operators are crucial in the success of the m-commerce industry, as they are responsible for a wide range of activities. Such activities include deciding if and when to invest in network infrastructure supporting nonvoice services, educating customers about the availability and uses of these new services, and incurring additional expenses to support compatibility with networks of other operators. Such companies typically utilize a subscription fee business model with customers, as well as a transaction-based fee (e.g., per "hit") business model with content providers.

• Application developers: Application developers include software developers and systems integrators that provide a wide range of services, such as hosting and transaction processing. Ultimately, these companies are responsible for delivering a practical solution for customers enabled through available technology. Thus, if they are successful in identifying and addressing customer needs, returns will be high for all involved in providing nonvoice mobile services. Developers may offer off-the-shelf products (e.g., chat programs), customized products developed specifically to meet one customer's requirement, or hybrid products based on generic products that are further customized with application-specific data. Typically, the business model adopted by these companies is based on software licensing fees, utility transaction costs, and subscription fees.

• Service providers (SPs): Similar to the various Internet Service Providers (ISPs) for the wired Web, Mobile Service Providers (MSPs) emerged to provide an easy way for customers to gain access to wireless networks and available solutions. In addition to this function, some literature includes content providers and operators under this category, as they have come to expand their offerings into the area of servicing customers as well. Strictly speaking, however, MSPs sell products and services of others under their name to customers.

• Technology vendors: The mobile value network member that transforms what is desired and theoretically designed to what is actually available is the technology vendor. They supply the necessary hardware and some of the software to enable the convergence of telecommunications and IP networks, ranging from transmission towers to mobile handset receivers. Internally, this group is made up of companies concentrating on different aspects of infrastructure; these further classifications can be seen in Figure 3, where the value network members are titled "technology platform vendors" (e.g., Palm and Microsoft), "infrastructure and equipment vendors" (e.g., Alcatel and Ericsson), "application platform vendors" (e.g., IBM and Motorola), and "handset vendors" (e.g., Palm and Compaq). These groups need to coordinate their efforts to prevent market inefficiencies, such as delays in releasing appropriate handsets for the latest networks made available (e.g., the case with WAP-enabled handsets). Such inefficiencies can cause not only financial turmoil for some of the players but also even complete abandonment and failure of new technology initiatives. The typical business model is based on sales or leasing, as well as license and maintenance fees applicable for software.

• Content providers: The information a customer accesses when using the wireless Web may be made available through content providers (e.g., Reuters), content aggregators (e.g., digitallook.com), or portal providers (e.g., Yahoo!). For simplicity, these threes types (or subsets) of companies are grouped here as "content providers." The typical business model is based on advertising and subscription fees. Content providers in the mobile industry currently tend to enter into exclusive agreements with network operators, giving rise to what is known as the "walled garden," where subscribers to specific network carriers gain access to an exclusive set of content providers. This is a symptom being addressed in efforts to provide a truly ubiquitous wireless network that is not only technologically compatible but also offers unrestricted access to content to all mobile users, regardless of carrier selection.

Revisiting the mobile value network while bearing in mind the m-consumer's needs and concerns for business applications would highlight the areas for which each of the value network members is responsible. A summary of these responsibilities is given in Table 3. While this summary is not exhaustive, it highlights the most pressing areas for consumers and the actions necessary to be taken by each of the value network members. Through the aggregated progress of these market players, m-commerce has the potential of realizing its potential growth in the m-consumer segment.