BBA (CBCS) Syllabus 2019 – 2020 OU

COURSE NO. GE -1
MOBILE COMMERCE

Objective: the objective of the course is to provide the students with

the mobile commerce concepts, environment and customer value.
UNIT – 1: INTRODUCTION TO MOBILE COMMERCE Definition, Scope of Mobile Commerce,
Benefits & Limitations of M- Commerce, M-Commerce Framework, M-commerce business models,
E-commerce Vs M-Commerce. Impact of MCommerce
UNIT – 2: MOBILE COMMERCE TECHNOLOGY: Types of Mobile clients (mobile phones, PDAs,
laptop computers, vehicle-mounted devices, hybrid devices), Device limitations: considerations for
user interface and application design Device location technology: GPS, triangulation. Mobile client
software: Mobile device operating systems, Micro browsers, Mobile device communications
protocols: WAP, i-Mode, Mobile device page description languages, Mobile device application
software.
UNIT – 3: WIRELESS COMMUNICATIONS TECHNOLOGY: Wireless wide area network
(WWAN) technology: cellular systems 2G (CDMA, TDMA, GSM), 2.5G (GPRS, EDGE), 3G
(WCDMA/UMTS, CDMA2000), 4G, 5G. Wireless local area network (WLAN) technology (wi-fi),
Wireless metropolitan area network (WMAN) technology (WIMAX) Wireless personal area network
(WPAN) technology (Bluetooth).
UNIT – 4 : M-COMMERCE APPLICATIONS : Mobile financial services, Mobile advertising,
Mobile Payment, Mobile Ticketing, Mobile product location and shopping, Mobile business services,
Mobile auction, Mobile entertainment, Mobile office, Mobile distance education.
SUGGESTED READINGS :
1. Mobile Commerce, Karabi Bandyopadhyay, PHI Learning Pvt. Limited, EEE, 2013.
2. Mobile Commerce: Technology, Theory and Applications, E.Brian Mennecke, J.Troy Strader, Idea
Group Inc., IRM press, 2003.
3. The Economics of Electronic Commerce, Choi, S. Y., D. O., Stahl, and A. B. Whinston, Macmillan
Technical Pub., 1997.
4. Mobile Commerce: Opportunities, Applications, and Technologies of Wireless Business, Paul May,
Cambridge University Press March 2001.
5. M-Commerce Crash Course, P. J. Louis, McGraw- Hill Companies.
6. The Definitive Guide, 5th ed., Musciano, C, and B. Kennedy, HTML & XHTML, O’Reilly Media,
2002.
What is Commerce?
• Commerce is the conduct of trade among economic agents. Generally, commerce refers to the
exchange of goods, services, or something of value, between businesses or entities.
• Commerce is the activities and procedures involved in buying and selling things.
• Synonyms: trade, business, dealing, exchange
M-Commerce
• Mobile Commerce also known as M-Commerce.
• Defined as the process of performing business transactions using handheld mobile devices
which are connected through wireless networks.
Business Transactions
• Buying and selling goods
• Making mobile payments
• Downloading audio/video contents
• Playing online games
• Using numerous s/w applications
• Getting mobile tickets

Mobile devices
• Cellular phones
• Handheld computers
✔ Palmtops

✔ Laptops

✔ Pagers

✔ Smartphones

✔ PDA
E-Commerce
• E-commerce (electronic commerce) is the activity of electronically buying or selling of
products on online services or over the Internet.
Evolution & Scope of M-Commerce
• M-Commerce provides instant connectivity between mobile users irrespective of their
geographical location and time of the day.
• With enormous growth of wireless and mobile technology and rapid penetration of
mobile phones in developing countries worldwide, the scope of m-commerce has
increased manifold.
• With the advent of super fast 3G access technology that ensures high speed data
transfer rates of the order 20 mbps, m-commerce is opening up new vistas digital
media applications.
• 3G technology, equipped with WiMax and UMTS standards for high speed mobile
broadband internet connectivity, supports mobile multimedia application delivery at
faster bandwidths.
• So, it is now possible for mobile users to watch their favourite TV programmes or
download and view famous movies in their mobile devices while travelling.
Advantages:
• Main advantage of M-Commerce is that it provides instant connectivity to the mobile
user, irrespective of his/her geographical location and time of the day
• Anytime Anywhere – wireless communication technology and wireless broadband
internet access, keeps mobile users connected with the internet while travelling across
the globe.
• Cost-effective – capturing of data and transmitted easily, bank account transfer at the
rate of SMS, customer support, contact less smartcard based mobile payments provide
a low cost toll tax payments in mass transit systems, payment of bills electricity,
telephone, petrol, grocery etc.,. Through phones, eliminating third party mechanisms
such as credit cards. This reduces the cost of payment to a large extent.
• Personalized service – knowledge of the user's location may be used to deliver timely
and useful contents such as product availability and discount information to their
potential customer. Timely information, such as flight schedules and flight availability
can be delivered to the user at the last minute. Delivery of time critical as well as
emergency information, SMS- based notifications and alerts can be made if the
location of the user is tracked.
 Applications of mobile commerce
● Audio/video applications: Downloading MP3 music, playing online games or participating in
live conferencing while in transit have become a reality now.
● SMS-based text messaging : finds wide acceptance in day-to-day business transactions.
Whether to display product promos, to announce new product launches or to give attractive
discounts, SMS have become an effective tool for mobile marketing. SMS-based
advertisements have become an integral part of m-commerce. The role that SMS play in
giving instant support to customers in the event of any kind of product failures or delivery
delays can neither be ignored nor downplayed.

• Micro payments: The mobile devices are poised to replace the credit cards of the users
in near future. The mobile phone will replace money in the pocket and will provide a
low cost, low risk alternative for credit/debit cards for making payments anytime,
anywhere and for anything.

Principle of mobile commerce

• Mobile commerce is based on wireless mobile communication system, which utilizes
digital cellular technology.
• The cellular network consists of a number of cell sites. Each cell site consists of :
- stationary base station ( a radio frequency transceiver)
- An adjacent tower antenna (for transmission and reception of signals) and
- A surrounding cell (a hexagonal-shaped geographical area).
• Each cell is allotted a band of radio frequencies and provides coverage to any portable
mobile device that comes within the geographical range of the cell. whenever a
mobile device such as a mobile phone or a pager, etc., comes inside a cell, it starts
communicating with the base station using one of the cell frequencies.
• the base station receives the signal from the mobile device and transmits using the
tower antenna to a distant base station for call delivery.
• To distinguish signals received from different mobile devices at the same base station,
different access technologies such as

❖ Frequency Division Multiple Access(FDMA)

❖ Code Division Multiple Access(CDMA)

❖ Time Division Multiple Access(TDMA) are used.

● Whenever a mobile user tends to move away from one cell to another adjacent cell,
the cell frequency switching occurs, whereby the old cell frequency is dropped and
the mobile device is automatically allotted a new frequency corresponding to the
adjacent base station.

Limitations
Mobile device limitations
Small screen size – Mobile devices have smaller screen size (of the order of 2 by 3
inches) and poor resolution which makes them inconvenient for browsing
 applications. Data entry can be quite difficult using a small combinational keypad that
comes with most of the mobile handheld devices. The wide and high resolution
screens in conventional desktops or laptops used in ecommerce applications offer ease
of use in data entry operations as well as viewing web pages. These larger screens
support 1920 x 1080 resolution and 3D graphics display. Although mobile devices
offer greater mobility and flexibility in accessing information, the smaller screen size
restricts the amount of information that could be presented and offers a less
convenient user interface in the form of menu-based scroll-and-click mode of data
entry.
Low speed processor: Most mobile devices come with low-powered processors with
much lower processing speed compared to sophisticated processors (i.e. core 2 duo or
i-core series) used in desktops or laptops. Such low speed processors restrict the
download speed in most mobile commerce applications. The applications requiring
too much processing power should be avoided as they may become irritably slow due
to low speed processors. Also, keeping the low processor speed in mind, the mobile
websites must be optimized to ensure customer satisfaction. Unnecessary plug-ins,
flash images and animations should be removed to ensure speed of delivery.
. Small memory capacity: The mobile devices do not have large storage space. The
memory capacity in mobile devices is in the order of 5 GB to 10 GB compared to 2
TB or higher used in desktops/laptops. So, it is difficult to store large video files in
mobile devices for future use. The mobile application developers must be concerned
about the size of their applications during the development phase.
low power backup: Mobile devices use batteries as their power supply. Normally,
power for a mobile device lasts up to 2-3 days, depending on the size of the device.
After this period, the battery should be recharged again, and it adds an additional
burden to the user who has to remember every now and then to recharge it.

Wireless network limitations

• Mobile commerce depends on wireless networks which are usually of lower speed
compared to wired networks. In many cases, wireless networks offer one-fourth speed
of standard wired networks. Also, most wireless networks are more common in urban
areas and some of the rural areas might not have wireless communication facilities. So
online mobile services may become unavailable in some rural areas, and thus the
popularity of mobile services may suffer. Unless the mobile device is 2.SG or 3G
technology compatible, the applications will become sluggish and unreliable
compared to wired network applications. Atmospheric interference and fading of
signals transmitted through wireless networks sometimes cause severe data errors and
may even lead to disconnections.
• Bandwidth restrictions - A major disadvantage of mobile commerce is the bandwidth
limitation, which imposes a limitation on speed of operation in various m-commerce
applications. Wireless networks use frequency spectrum to transmit information
across the network. Regulatory bodies control the use of available frequency spectrum
and allocate the spectrum to various mobile operators. In India, the frequency
spectrum were initially allocated and regulated by Department of Telecommunication
 (DoT). Later, the Telecom Regulatory Authority of India (TRAI) was set up to control
the usage of frequency spectrum. The limited availability of bandwidth to various
mobile operators in turn restricts the data rate in mobile commerce applications. The
GSM technology offers the data rate of the order of 10 Kbps and 3G technology can
go up to 10 Mbps.
• Security issues - Mobile devices are more vulnerable to theft, loss and mishandling.
Special care must be taken to ensure that the security and privacy of the mobile
customer are not compromised at the event of loss of a mobile device. This includes
not storing sensitive information in the mobile devices and changing/locking of PIN
(password fast and simple at the time of need.
• Mobile commerce employs public wireless networks for transmission of signals
which can be easily intercepted by hackers for capturing/ altering streams of data
travelling through the wireless medium. In wired networks, in order to gain access,
the intruder has to gain physical access to the wired infrastructure.
• In wireless networks, anyone with the ability to receive signal in a mobile device can
gain access to the network. In order to protect the wireless network from unwanted
users, various encryption and authentication techniques should be employed.
• As the handheld devices have limited computing power and storage capacity, it is
difficult to employ 256 bit encryption technique that requires enough computing
power. However, the SIM cards inside a cell phone can include the digital signatures
of the PKI system. Thus, the PKI system of digital signatures can be integrated in a
mobile device that adds to the security of the mobile application.
• Authentication of mobile devices prior to carrying out any financial transaction is
another important issue. The Subscriber Identity Module (SIM) stores the subscriber
identity in the form of cryptographic keys. The authentication server of the wireless
network stores the matching keys and verifies the user identity prior to any
transaction. Though it is far easier to intercept signals over wireless networks, the
encryption and authentication mechanism makes it harder to decipher by the
unwanted user.

Framework of M-Commerce
• The purpose of frame work is to develop a structured integration of mobile services,
applications and technology resources so that it will be able to deliver diverse range of
value-added services in different industry sectors, and at the same time aim to reduce
operating cost and improve efficiency to attract the end user population.
• The mobile commerce framework consists of the four basic building blocks as follows
1.Content Management 2. Technology Infrastructure
3. Application Development 4. Business Service Infrastructure
• Content Management - This component deals with the creation, distribution and
management of diverse range of media rich digital contents that can be browsed
through the small screens of the mobile devices.
• The digital contents are used in performing various business transactions such as
buying and selling of goods, making online payments, product promos and providing
on line customer support. An important part of content management is the ability to
track different content providers and maintain and manage the relationships among
them.
• The security and authenticity of the contents must be guaranteed and the access
control mechanism must be provided to prevent unwanted users from misusing the
document. The content distribution, rights management and clearing financial
settlements, all come under the purview of content management module .

• Technology Infrastructure - This component deals with the distribution of digital contents
and transaction details over wireless communication networks to customer locations or other
business installations.
• The wireless network infrastructure provides the very foundation of mobile commerce
framework as it fulfills the basic requirements of data transmission between various business
partners while performing any business transaction.
• The technology infrastructure includes wireless communication technology, Wireless
Application Protocol (WAP) and mobile security technology. These technologies need to
support digital content distribution, mobile application development and distribution and also
provide a secure technological platform for mobile billing and prepaid services through the
use of mobile Virtual Private Networks (VPN). Figure 2 depicts the Mobile Commerce
Framework.
• Application Development - The application development component of mobile commerce
framework deals with the diverse range of mobile commerce applications.
• The main purpose of these mobile applications is to provide the product information to the
end users, and also to enable them in performing the mobile business transactions. There are
four major categories of mobile applications namely the information applications,
communication applications, Entertainment applications and commerce applications.
• Several mobile applications, such as mobile ticketing, mobile banking, mobile advertising,
mobile office applications, etc. fall under these categories. These applications support key
business functionalities in respective verticals and are meant to achieve higher revenue
generation as well as cost reduction.
• Sometimes, more than one application are combined together to deliver an aggregated
service, which leads to further cost reduction. With the rapid development in various
emerging mobile technologies, the application development is going through an evolutional
stage.
• In order to meet the requirements of today's rapidly evolving markets, the mobile
applications must be developed in an innovative manner so that it allows the service provider
to quickly address the growing demands of the market and also at the same time offer more
profitability and greater cost reduction.
 • Business Service Infrastructure - The business service infrastructure provides the backbone
to the mobile commerce framework. It supports the back office functionalities, such as
payment services, location and search facilities and security arrangements of the mobile
commerce systems.
• Production and fulfilment of these services are beyond the scope of traditional telecom
service providers. These services are managed and delivered by some outside vendors, who
have the ability and experience to provide such functionalities.
• They maintain the required infrastructure for supporting secured financial transactions in
mobile commerce environments and also provide back-end support for searching and other
facilities.

Content Management
[creation, Distribution and Management of digital Contents

Business Service
Mobile Application
Infrastructure
Development
• Payment service
• Java ME
• Location search Mobile Commerce • Android
Facility
• Apple iOS
• Security
• Objective C
Arrangements
• HTML5
• Back End-support
Technology Infrastructure
Wireless Networks, Wireless Application Protocol(WAP)
Security Protocols, WML, Mobile Browsers
• Such back office systems are meant to be flexible enough and also are capable of rapid
deployment of new services. They have a direct impact on end user experience, and have the
greatest influence on the success or failure of the service provider. With the help of such back
office infrastructures, mobile service providers can avoid upfront capital IT expenditure, and
also these managed services offer the service providers the ability to quickly upgrade to the
newer technological environment without any Significant investment.
 • Above four components are the four pillars of mobile commerce framework and all m-
commerce activities revolve around them. Whenever a mobile user tends to download MP3
music or a latest movie in his/her mobile device, sends an SMS requesting online payment to
a bank, submits online order form requesting purchase in a mobile browser or books a mobile
airline ticket, he/she is indulging in either or all four of the above mobile commerce
framework components e , In order to cope with the dynamic .nature of the modern day
lifestyle, people are demanding more mobility in accessing their business applications.
• A properly integrated and well coordinated mobile commerce framework needs to be
developed in order to provide easy-to-use and secure mobile services to end customers. The
main purpose of a structured and balanced mobile commerce framework is to enable the
organizations to rapidly adapt to the latest mobile technologies and to ensure customer loyalty
by providing them improved and enhanced services in sync with the growing market
demands.

M-Commerce business models:

• A business model determines the path or process through which a business
organization can realize some profit.
• 4 major M-Commerce business models are:

✔ Payment Model

✔ Advertiser Model

✔ Shopping Model

✔ Content Provider Model

• (1) Payment Model - In this model, mobile payment service providers offer mobile
payment services that allow users to make cashless payment transactions including
banking transactions, share trading, tax/bill payments and ticket or other retail
purchases using credit/debit card or bank PIN. The payment service providers have
collaboration with banks (or other financial institutions) and/ or mobile network
operators, and accordingly get bank-controlled mobile payment model or operator
controlled mobile payment model. The payment service provider charges a certain
percentage fee for each payment transaction made through the payment application.
Alternatively, the user can pay a nominal monthly subscription fee to the payment
service provider and can use the service as and when required.
• (2) Advertiser Model - This model is an extension of traditional e-commerce
advertiser model and provides mobile websites which can be viewed by mobile users
in their handheld mobile devices. Advertising companies can display their advertising
messages in the website and pay a rental fee to the hosting website for displaying their
messages. These mobile advertising websites usually offer some basic services such
as email service, search engines, news service or social networking service to the
 users and post advertising messages in these sites to enjoy greater coverage. The
advertisements often come with purchase buttons that allow users to purchase the
product directly from their mobile devices. The mobile payment service is also
provided to facilitate mobile purchase directly from the advertising websites. The
advertiser companies pay a fixed fee to the advertising website for displaying their
advertising messages. Additional revenue is generated for each purchase transaction
made by the user through the website.
• (3) Shopping Model - This model is similar to e-commerce merchant model where
retailers create mobile websites to display their range of products to the mobile
devices of the customers. The mobile users can browse the mobile websites in their
WAP enabled mobile screens and select and purchase any product of their choice.
Mobile payment option is also provided in the website so that the users can make
mobile payment for the purchased product and complete the deal even while in transit
or far away from the actual store location. Thus, shopping model allows retailers to
generate additional revenues through mobile shopping and can improve their profit
margins.
• (4) Content Provider Model - In this model, mobile service providers offer a host of
entertainment contents, such as breaking news, weather forecast, traffic updates,
music, mobile games, TV shows, video content, movies, etc. that could be
downloaded to user mobile devices. Network operators have tie-ups with various
content providers and offer both subscription-based services as well as pay-per-use
services to mobile customers. Location-based services, such as map-based
navigational services, discount coupons offered in local retail stores or restaurants,
news of local events, etc. are also delivered in customer mobile devices. The revenue
is generated through subscription fees (for news, traffic/weather updates, movies,
games), usage fees (TV shows, videos, games etc.) or data download fees (for e-mails,
e-books, etc.). Various media houses, press agencies or content aggregators follow
this model for generating extra revenue through mobile channel.

E-Commerce vs M-Commerce:

Factors E-Commerce M-Commerce

Mobility • Employs wired networks, • Employs high frequency wireless networks, hence it
hence is restricted inside a is boundless in nature
building • Offers anytime, anywhere connectivity
• Offers anytime connectivity
Reliability • More reliable • Suffer from interference from adjacent channel that
• Data transmission is better tend to reduce intensity and quality of transmission.
Speed • Transmission speed is very • Transmission speed is less compared to wired
high. networks
Security • Transactions are more • Transactions are vulnerable to hackers and security
secure attacks
Cost • Initial set up cost is high • Initial set up cost is much lower and maintenance
and periodic maintenance is cost is minimal
mandatory
Usability • Convenient and user- • Small screens and low battery life is a problem
friendly

Impact of M-Commerce :
• Advent of wireless and mobile technology and rapid penetration of mobile devices in
modern society have created new opportunities for the corporate world: In general,
mobile commerce is considered as an extension of conventional internet based e-
commerce. However, as the number of mobile device owners is far greater than that
of internet users, mobile commerce creates a huge impact on day-to-day activities of
both customers as well as business owners.
• By providing instant internet connectivity and greater mobility to billions of mobile
users, m-commerce is redefining the relationship between customers and goods and
service providers. It is predicted that in near future, mobile commerce will largely
influence the marketing orientation of almost all the major industry sectors, and
hence, will alter the general dynamics of the market.
• In addition to providing the users with mobility and location tracking, m-commerce
applications are capable of achieving a high level of personalization and offer
intractability with the individual customer.
• In a highly interactive environment, personal profiles, product preferences, home
office locations, payment details, etc. can be collected directly from the customer
from their mobile devices to generate an accurate and personalized database.
Conversational advertising can be delivered directly to the mobile handset by a brand
to describe the benefits of the product.
• This is an emerging concept whereby the mobile user can opt in to receive product
information from a brand by giving the mobile number to the company. By utilizing
the location tracking facility of m-commerce, special customer zones can be created
which will be characterized by specific customers with different product preferences.
• The customers in a zone can be dynamically informed about various discounts and
deals available in the local stores. Knowledge of customer numbers and preferences in
a zone will help the suppliers to estimate the demand for a particular product, and also
let the customers be informed instantly about any discounts/price reduction offered in
nearby stores.
• In a highly interactive environment, personal profiles, product preferences, home
office locations, payment details, etc. can be collected directly from the customer
from their mobile devices to generate an accurate and personalized database.
Conversational advertising can be delivered directly to the mobile handset by a brand
to describe the benefits of the product.
• This is an emerging concept whereby the mobile user can opt in to receive product
information from a brand by giving the mobile number to the company. By utilizing
the location tracking facility of m-commerce, special customer zones can be created
which will be characterized by specific customers with different product preferences.
• The customers in a zone can be dynamically informed about various discounts and
deals available in the local stores. Knowledge of customer numbers and preferences in
a zone will help the suppliers to estimate the demand for a particular product, and also
let the customers be informed instantly about any discounts/price reduction offered in
nearby stores.
• With the introduction of newer display technologies, such as electronic paper, liquid
crystal display and digital paper, the mobile electronic readers or e-books have
become commonplace. A large number of mobile users have started carrying e-
readers to download online books or online newspapers while travelling.
• The impact of m-commerce is all-pervasive and ever-expanding. With the cost of
mobile devices going down and introduction of newer and powerful technologies,
more and more people are indulging in numerous mobile applications and eventually
m-commerce will emerge as the most preferred tool for performing business
transactions while in motion.

Short Questions:
1. M-Commerce
2. E-commerce Vs M-Commerce
3. Advantages of M-Commerce
4. Limitations of M-Commerce
5. Applications of M-Commerce

Long Questions:
1. Define mobile commerce. Describe how business transactions are performed
through mobile devices.
2. What is mobile payment? Describe SMS-based transactional payment.
3. What is a cell site in a cellular network? What are the components of a cell site?
4. What are the benefits of mobile commerce? Describe in detail.
5. Describe the limitations of mobile commerce and suggest possible remedies.
6. Explain applications of M-Commerce.
7. Explain Frame Work of Mobile Commerce.
8. Explain M-Commerce Business Models.
9. Explain Impact of M-Commerce in detail.
10. Explain about scope of M-commerce.