A Two-Year Lag in Mobile Commerce?

Carriers in Europe and the United States are making a critical mistake by
failing to learn from Japan’s mobile commerce success, says a new industry

In fact, it will take Western competitors two years to reach the $400 million
of mobile commerce revenues generated in Japan today, says research firm Jupiter Research.

Only the carriers that execute effectively will be in a position to profit
from a global m-market that is expected to reach an estimated $7.6 billion in
2003, Jupiter said.

The new research, presented at Jupiter’s Global Wireless Forum in Stockholm,
shows that by the end of 2000, the number of wireless subscribers with
Internet-enabled handsets will reach 6 million both in the U.S. and Europe,
versus 30 million in Japan.

Jupiter said that it estimates that revenues generated from mobile commerce
in 2000 will amount to $10 million in the U.S. and $15 million in Europe,
against almost $400 million in Japan. As the market begins to reach critical
mass in 2003, the number of wireless subscribers with Internet-enabled
handsets will jump to 115 million and 254 million for the U.S. and Europe
respectively, with mobile commerce revenues of $600 million in the U.S., $1.7
billion in Europe and $3.5 billion in Japan.

Jupiter says carriers in Japan provide the models for best practices in the
mobile commerce space.

“The notion that the success of mobile services in Japan is wholly
attributable to cultural
factors is a handy cop-out by carriers in other regions,” said Seamus
McAteer, a research fellow with Jupiter Research. “In launching iMode, NTT DoCoMo set a good example: It
adopted an open platform and ensured that consumers’ preferred services get
primary placement. This open approach, giving the consumers what they want,
characterizes the type of transparent business model that others should

Jupiter said Japan’s success in mobile interactive services is largely built
around four key elements:

  • An adequate supply of handsets optimized for data delivery.
  • The implementation of a packet data network to facilitate economic
    delivery of interactive services.

  • Equal opportunities for content providers that spur innovation and drive
    third-party advertising that builds buzz about the platform.

  • A billing infrastructure upgraded to support charges for premium services.

Carriers in the U.S. and Europe have struggled to find profitability even in
the face of an increasing user base, Jupiter said.

Jupiter Research is a Jupiter Media Metrix company that provides
comprehensive views of industry trends, accurate forecasts and reports on
best practices.

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