Lines cross over wireless business future

Industry observers all agree that mobile ecommerce will be a success, but two leading analysts have given wildly differing predictions about how successful it will be.

Industry observers all agree that mobile ecommerce will be a success, but two leading analysts have given wildly differing predictions about how successful it will be.

The two reports, from IDC and Forrester Research, put the value of transactions conducted on European mobile phones, also called mobile commerce, at £25.6bn by 2004 and £3.2bn by 2005, respectively.

Tim Sheedy, a wireless and mobile communications analyst, and author of the IDC report, said he believed m-commerce applications are the "killer applications of the mobile internet".

"Applications such as these are what's required if the market is to grow. As organisations begin to launch such services, there will be a huge levels of growth in mobile internet usage," he said.

IDC predicted that there will be more than 300 million mobile phone users by 2004. But Carsten Schmidt, an associate analyst at Forrester, said PCs will dominate ecommerce and that the appeal of mobile phones will be limited.

"Pioneering European retailers have moved beyond the PC to offer Wap sites and interactive TV shops, but more than half of projects fail to meet expectations. Just because a retail sale is possible on a device, doesn't make it probable," he said.

Forrester predicted that mobile phone transactions will make up just three per cent of online retail turnover by 2005, and personal digital assistants just 0.1 per cent.

Cellular phones favour only transactions that are timely, simple and location-based, but PCs will dominate ecommerce, capturing more than 80 per cent of the online market, said Forrester. The remaining 16 per cent is attributed to sales generated via interactive TV.

Businesses planning ecommerce strategies are in a quandary about what to do over m-commerce, although most UK firms do not seem too worried just yet.

A representative of eCentreUK, the most cutting edge of the trade associations in the Alliance for Electronic Business, said: "M-commerce is something we're not really studying yet, but we do plan to do so. Our members have yet to come to terms with ecommerce."