m-Commerce Smart

(Wireless Review)Dr. James Canton is a technology futurist and author of the books, Future Smart and Technofutures. He’s also the president of a think tank known as the Institute for Global Futures, which analyzes emerging business trends and technologies.

Canton said technology seduced him during his stint as a strategic planner for Apple Computer in the late 1970s. As a result, the study of how technology affects business and society has become his life’s work.

Recently, he sat down with Deborah Young, Wireless Review revenue management editor, to talk about being future smart with wireless.

Wireless Review: Why do you consider m-commerce the next big wave in wireless?

Canton: A larger percentage of employees are going to be mobile. They aren’t going to be in offices per se. They’re going to be in the marketplace. If they have a wireless technology and can do quality transactions, whether buying, selling or communicating, it’ll facilitate an entirely new wave of productivity. And that’s where I think we’re going.

Wireless Review: Are people ready or even interested in m-commerce? For example, why would I want to purchase a pair of jeans while I’m riding the bus?

Canton: If I’m not in my office, if I’m not at my computer, it becomes more convenient for me, in this supercharged, hyper-competitive marketplace, to have a wireless device that I can do my computing, my transacting, my purchasing and my selling on. I’m viewing wireless technology as the key enabler of the next wave of Internet commerce, which is m-commerce.

But the infrastructure has to change. Let me give you an example. You’re on the bus, and you get a beep on your cell phone or your PDA, whatever your wireless device is. Those jeans that you’re looking for, there’s a 15% discount at the next stop. Or, even more efficient, the Levi’s that you’re looking to buy, here’s an offer of 15% off, and all you have to do is say yes, and we’ll have it shipped to your house.

It’s all pushed to you through your cell phone, your personalized shopping profile. That’s the future of wireless commerce, the blending of location-specific, personalization and eventually video broadcasting.

Wireless Review: What will be the first application that drives consumers toward m-commerce?

Canton: First of all, the banking community’s got to get their act together. They still haven’t figured out how to get a secure-banking, digital-cash standard together so that we can even have the simplest things in the United States, such as smart cards. The rest of the world is way ahead of us in terms of smart card deployment and digital cash adoption.

Second, the United States is a third-world nation when it comes to GSM, the next-generation cellular platform. We’ve got to get those things together so that I can pick up my cell phone and I can call {from} London or Jakarta, which I can’t do yet. And there’s no reason why I shouldn’t be able to do it. It’s just that the wireless carriers haven’t gotten their act together. There’s not a wireless protocol in terms of security, because the wireless community hasn’t gotten its act together.

We need these three worlds to come together before this platform starts to really show up and to be useful. Thank God we’ve got one GPS network out there, or we’d have problems with integrating that as well.

The next step will be wireless everything; wireless devices that you can’t even imagine, that provide MP3 files, that are doing peer-to-peer, Napster-type integration, that are helping us shop. You’re going to start seeing those showing up as early as six to eight months from today.

Nokia’s experiments in Finland and Europe of location-based merchandising and buddy systems have been interesting, and I think you’re going to start to see that show up here.

Wireless Review: So you think location services are going to drive m-commerce?

Canton: Personalized messaging, location-based services are going to be key drivers. Another key element is going to be the shrinking of Web content dropped into a WAP environment. That’s going to be another key driver as well. In other words, I want to see on my cell phone or my PDA, I want you to edit and shrink vibrant Web content down to very small sizes. When that starts to happen, you’re going to see a lot of change in terms of adoption of customers.

Right now, we’ve got a GPS network that’s not utilized. The National Security Agency, the CIA gave it up. What do we get? We get a very precise GPS system. Now, there are a couple of pieces that are missing in terms of key drivers. Right now, merchants haven’t come to you yet to figure out what your interests are. Why? Because if they had an understanding about that — and somebody’s going to do this by the way. Somebody’s going to turn this into a great business, and believe me, it will not be the major retailers or the major brands.

What they’re going to do is understand you as the customer. Then they’re going to extract your personal profiles about shopping and merchandise, stuff you like. They’ve got to look at your economics, how much money you have to buy x, y and z. Then they’re going to go to the brands and retailers and tie that to location-based services and get a relationship with your wireless carrier.

I’m forecasting that there will be somebody who will step into the game, be able to understand wireless commerce and be able to then build a personalization layer on top of this wireless Internet infrastructure and then will give you a cell phone, will give you a wireless PDA. You won’t have to pay anything as long as you’re willing to use it. Why? Because every time there’s a new merchandising opportunity from, let’s say Nike, because Nike now knows that you like to run and you like these kinds of sneakers, they’ll go ahead and push an offer to you of 15% off. By the way, that whole technology is presented by Bank of America because they want to get your banking and FedEx wants to get your shipping so they want to play.

And you know what? Somebody’s going to leverage all of that as your wireless, e-commerce intermediary to make all of that work. The next step is an infrastructure that pushes offers to you, that is opt-in. You get enrolled. Out of half a billion wireless customers over the next three to four years, at least 20% of them are going to say yes. That’s the end of direct marketing, as we know it. Why? Because all of a sudden, you’ve got a wireless environment, which has a personalization level.

Remember, what made the Internet take off to begin with? If the Internet didn’t have color or an easy-to-use interface or didn’t have fast bandwidth or didn’t have multimedia, it never would have taken off. The next generation is going to be personalized, tied to your shopping profiles, your need profiles, your communications profiles, things that are interesting to you about news, content, merchandising, shopping.

Wireless Review: What trials do you see as promising?

Canton: Nokia’s experiments in Europe are very interesting on location-based peer communications. Here are 20 people on your buddy list, and when you’re coming within a certain location of them, you can contact them if you choose to be connected. That’s a successful one.

DoCoMo’s i-mode -- you’ve got 10 million people sending instant messages back and forth. Now we know that AOL, for instance, has reached out to form a venture with them for $200 million. And why? Because DoCoMo already understands the messaging potential of being able to connect people together on that platform. And that’s a 3G platform. So we know that instant messaging is going to be cool.

Wireless Review: What would be your advice to wireless carriers?

Canton: My advice to old-economy carriers would be, ‘Wake up and smell the coffee. You have to change faster. You’ve got to understand that there’s a mobile lifestyle emerging. You have to understand that m-commerce is a key driver, and if you don’t partner with some of these new economy carrier companies, they may be buying you.” This past year, we had AOL buying Time Warner. If you had asked anybody about that (in the past), they would have said, ‘You’re nuts!’

Wireless Review: How can old-economy companies compete with this new culture of new companies?

Canton: The old economy telcos are going to have to either build out those capabilities internally to provide enhanced services and to re-brand, or they’re going to have to acquire some of these (new economy) companies to be able to get marketshare and innovation in-house. And a lot of them have not recognized it yet.