Topic X Wireless

Technologyand
4
Mobile
Commerce
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Describe the wireless technology that supports mobile commerce;
2. Explain the major type of wireless telecommunications networks;
3. Discuss m-commerce applications in various areas; and
4. Discuss the security and ethical issues in m-commerce.

X INTRODUCTION
What is a mobile commerce? Have you ever come across this term before? If you
have not, let us figure out the meaning of this term.

Mobile commerce (M-commerce), which is an extension of e-commerce, involves

any business activities conducted over a wireless telecommunications network.
Similar to other e-commerce activities, m-commerce can be done via the Internet,
private communication lines, or other computing networks.

The advancement of powerful mobile devices such as smart phone has created
opportunities for businesses to deliver services to the existing customers and to
attract the new customers.
110 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

In this topic, you will be given an overview of wireless technology and the major
type of wireless telecommunications networks. You will also get to know the
applications of m-commerce in various areas and the security and ethical issues
involved in m-commerce.

4.1 THE INTERNET

In the traditional computing environment, people are working at a fixed location
with desktop computer connected to the Internet and other peripherals with
cable. This environment has created difficulties for people who wish to be
connected to the Internet anytime and anywhere, especially among sales
personnel, file-service workers, inspectors, and executives who travel frequently.
Wireless technology has been one solution to this situation.

Let us look at Figure 4.1 which shows the different types of computing devices
used: the old-style wired desktop computer and the modern-style wireless
laptop.

Figure 4.1: Computing devices

Source: http://computersight.com/hardware/which-is-most-
reliable-computer-laptop-or-desktop/
http://blog.loaz.com/timwang/laptop-notebook.php

A wireless computing environment consists of the following infrastructures:

(a) Hardware;
(b) Software; and
(c) Wireless communication network.

These infrastructures will be explained in the following sections.

 TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE W 111

4.1.1 Hardware
Mobile devices come in different shapes and sizes such as laptops, netbook, PDA,
and smartphone. Most of these devices have the basic function of supporting
audio, video, Internet browser, email and Internet connection. The following
devices are converging toward a small footprint that combines all the capabilities
of the devices into one package, thus, making it difficult to differentiate them in
terms of functionality:

(a) Personal Digital Assistant (PDA)

PDA (also called as palmtop), as can be seen in Figure 4.2, was originally a
standalone hand-held device which provides user access to address book
and calendar, and supported calculation and desktop application such as
word processor and spreadsheet.

Figure 4.2: Personal digital assistant

Source: http://kellepcharles.blogspot.com/2008/09/personal-
digital-assistant-pda-security.html

In recent years, PDA received intense competition from smartphone, in

terms of the functionality aspect. It was reported that the sales of PDA
dropped 40% from 2006 to 2007. As a result, PDA manufacturers such as
Palm Inc. have created PDA models with cell phone capabilities and
produced devices called Palm Treo and Palm Pre.

(b) Smartphone
As shown in Figure 4.3, a smartphone is a mobile phone with PDA-like or
PC-like functionality, including email, web browsing, address book,
calendar, calculator, digital camera, word processor, spreadsheet and
multimedia capabilities.
112 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

Figure 4.3: NOKIA smartphone

Source: http://www.slashphone.com/87/1943.html

Top smartphone manufacturers in the world include Nokia, Research in

Motion (RIM), Apple, HTC, and Motorola. Some of the latest smartphone
models available in the market include Nokia N8, Apple iPhone 4, and RIM
Blackberry Torch.

ACTIVITY 4.1

Access a smartphone review website. What are the criteria that play a
part in your selection of a smartphone?

4.1.2 Software
Do you know that the software for mobile devices must be customised to the
unique features of mobile devices such as small display screen, small bandwidth,
limited input capabilities and limited memory? The major software components
of a mobile device include the following:

(a) Mobile Operating System

The function of mobile operating system or mobile OS is to control a mobile
device, in the similar way an operating system such as Windows, Mac OS
or Linux controls a desktop computer. The function of mobile OS deals
more with the wireless connection, various mobile multimedia format and
input methods.
 TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE W 113

The mobile OS must be able to handle a variety of input method/interface

approach such as a touch screen, mini-joystick, jog dial and thumb wheel.
The major mobile operating systems that support the mobile devices are
Symbian platform, RIM Blackberry OS, Apple iOS, Microsoft Windows
Mobile, and Google Android.

(b) Microbrowser
Microbrowsers (also called as mobile browser, minibrowser or wireless
Internet browser) resemble standard Internet browsers on desktop
computers. Microbrowsers are used to access the Internet via mobile
devices. Similar to mobile operating systems, microbrowsers are adapted to
deal with the unique features of mobile devices which are small screen,
limited bandwidth and small memory. Examples of microbrowsers include
Internet Explorer Mobile and Opera Mobile.

4.1.3 Wireless Telecommunications Networks

Mobile devices are able to connect to other devices and the Internet via
telecommunication network. The criteria used in selecting a telecommunication
network depend on the following elements:
(a) The purpose of the connection;
(b) The capabilities and location of the device; and
(c) The availability of connection options.

Typically, there are four types of telecommunication network for mobile

environment and they are:

(a) Personal Area Networks (PAN)

A personal area network (PAN) is used for mobile users who make short-
range devices-to-device wireless connection within a small area, such as a
room. Bluetooth is the common way to establish a PAN.

Bluetooth is a set of standards (IEEE 802.15) that enables wireless

communication between mobile devices over short distances of up to 20 m.
Bluetooth uses low-power radio technology in the 2.4 GHz radio spectrum.
Today, most mobile devices are Bluetooth-enabled. Limitations of Bluetooth
technology include short range capability and interference from devices,
such as microwave oven and cordless phone, that use the same radio range.
114 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

(b) Wireless Local Area Networks (WLAN) or Wi-Fi

A wireless local area network (WLAN) is a wireless network within a
building and is equivalent to a wired local area network (LAN) but without
cable. There are five forms of Wi-Fi protocols as shown in Table 4.1 below.

Table 4.1: Forms of Wi-Fi Protocol

Form/Release Description
802.11 (1997) Offers transfer rate of up to 2 Mbps and a signal range of up to 20 m for
indoors and 100 m for outdoors.
802.11a (1999) Offers faster transfer rate (54 Mbps) but a weaker signal range (maximum
of 30 m indoors and 120 m outdoors).
802.11b (1999) Most widely used standard, with 11 Mbps for signal ranges up to 100m
for indoors and up to 275 m for open space.
802.11g (2003) Combines the strength of both 802.11a and 802.11b in terms of transfer
rate and coverage range. It is backward compatible with the two
standards. It has become the new 802.11 standard.
802.11n (2009) A standard under development with the promised bandwidth of up to
600 Mbps using 4 MIMO streams (4 MIMO X 150 Mbps).

ACTIVITY 4.2

In September 2008, Penang Government announced a state-wide Wi-Fi

project which was expected to be ready in two years time.

Find out the latest progress of this project and whether it has been
successful or otherwise. Discuss it with your course mates.

Wi-Fi protocol 802.11g is used in commercial environment if cost is not a

major issue where mobile devices can take advantage of the 54 Mbps
transfer rate. However, 802.11b is still the Wi-Fi standard of choice for
inexpensive installations in most homes and public areas. In Malaysia, TM
currently has more than 2,300 Streamyx Zone (using 802.11b/g) locations
nationwide at selected public places in major cities such as shopping malls,
F&B outlets such as Pizza Hut, Secret Recipe and Burger King, airports,
convention centres, hotels, university campuses, hospitals, golf club houses
and other locations.
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ACTIVITY 4.3

Access the following Streamyx website shown below. Identify the

nearest Streamyx Zone from your home and office.

http://www.streamyx.com.my/related_products/related_products.php
?id=streamyx_hotspot_faq

(c) Wireless Metropolitan Area Networks (WMAN) or WiMax

Wireless Interoperability for Microwave Access (WiMax) is a wireless
standard using IEEE 802.16 for making broadband network access for data
and voice over an area of up to 50 km, which is about the size of a
metropolitan. WiMAx does not require a clear line of sight to function,
similar to how satellites operate. WiMax uses radio-based, ultra-wide
bandwidth transfer speeds of up to 268 Mbps.

In 2007, four firms were given the licence to operate WiMax in Malaysia
and they are:
(a) Packet One Network P1 WiMax (in operations since August 2008);
(b) REDtone WiMax (launched in April 2009 and only available in East
Malaysia);
(c) YTL Communications Y-Max Networks (expected to start the
operations in November 2010); and
(d) Asiaspace Amax WiMax (launched in February 2010 but offline since
April 2010).

(d) Wireless Wide Area Networks (WWAN)

A wireless wide area network (WWAN) is the largest wireless network that
covers over a large geographical area and is usually operated by
telecommunication companies. Currently, there are six generations of
communication technology as shown in Table 4.2 below.

Table 4.2: Generations of Communication Technology

Generation Description
IG Analog-based technology from 1979 to 1992. Used exclusively for
voice.
2G Based on digital radio technology and still in use today. Includes
text messaging (SMS).
116 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

2.5G Based on cell phone protocol such as GPRS and CMDMA 2000.
Includes limited images in text messaging.
3G Started in 2001 in Japan. Supports rich media such as video.
3.5 G Expected to be seven times better than 3G with download speeds
of 14 Mbps and upload speeds of 1.8 Mbps. Includes mobile voice
telephony, video telephony and mobile TV.
4G Also called as Long Term Evolution (LTE) technology with 2.6
Ghz bandwidth and is expected better display in multimedia
content.

Malaysian government awarded two 3G licences to Telekom Malaysia (currently

known as Celcom Axiata, after merged and demerged) and Maxis in 2002 and
two more to TIME dotCom (the service is taken over by Digi), and U Mobile in
2006. According to the Malaysia Communications and Multimedia Commission
(MCMC), there are 7.347 million 3G subscribers at the end of 2009. It is also
expected that the tender for 4G license will be announced in 2011 and made
commercially available in 2012 or 2013.

ACTIVITY 4.4

(a) Access the following MCMC website:

(http://www.skmm.gov.my/);
(b) Find out the latest statistics of broadband subscribers in
Malaysia; and
(c) Do you think Malaysia will achieve 50% household broadband
penetration by the end of 2010? State your reasons.

SELF-CHECK 3.2

What are the differences between WiMax and 3G?

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EXCERCISE 4.1

1. What is a Wi-Fi?
2. Using your own word, explain why you prefer a Wi-Fi
connection compared to a fixed-line connection at home.

You can visit the following websites to get more information on:

(a) Mobile Devices

x http://www.apple.com/iphone/
x http://www.palm.com/my/

(b) Mobile Computing Software

x http://www.symbian.org/
x http://www.android.com/

(c) WiMax Operators in Malaysia

x http://www.p1.com.my/
x http://www.ytlcomms.my/
x http://www.asiaspace.com.my/
x http://www.redtone.com/wimax

4.2 M-COMMERCE APPLICATIONS

Let us look at the areas where mobile commerce is applied. In this section, we
will mainly concentrate on the following aspects:
(a) Mobile financial applications;
(b) Mobile shopping, advertising, and content provision;
118 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

(c) Mobile entertainment; and

(d) Location-based m-commerce.

4.2.1 Mobile Financial Applications

Mobile financial applications allow users to conduct financial transactions via
mobile devices anytime and anywhere, replacing ATM, credit cards, and bank
branches. The common mobile financial applications include mobile banking and
mobile payment. Today, banking institutions are offering customers mobile
access to financial and account information in addition to Internet banking. For
instance, customers are able to access account balances, transfer funds and pay
bills.

Let us look at banks which have applied the m-commerce concept successfully in
their operation:

(a) Standard Chartered Bank

Standard Chartered Bank is the first bank in Malaysia to offer mobile
banking services using smartphone in 2008. Without the need to download
and install any software, the mobile banking services allow customers to
view account information, perform transfer to personal and third party
accounts, pay utility and credit card bills and check latest foreign currency
rate.

(b) CIMB
CIMB Clicks Mobile Banking is the first to have Internet banking features
and capabilities, unlike other mobile banking services which use SMS to
make transactions.

ACTIVITY 4.5

Identify the features and capabilities of CIMB Clicks Mobile Banking

at the following website:

http://www.cimbclicks.com.my/faq_mobilebanking.htm#1
 TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE W 119

4.2.2 Mobile Shopping, Advertising and Content

Provision
Do you know that an increasing number of online vendors allow customer to
shop from mobile devices such as search for information, compare prices, use a
shopping cart, place order and view order status? For example, the major US
pizza chains, such as Pizza Hut and Domino, allow customers to order pizza via
SMS (refer to Figure 4.4). Amazon and eBay also allow customers to access their
accounts, browse, search, bid and rebid on items.

Figure 4.4: Dominos pizza advertisement

Source: http://mobile.engadget.com/2007/08/17/dominos-now-
accepting-pizza-orders-via-sms-in-the-uk/

In Malaysia, more advertisers are expected to tap into the growth of mobile
advertising as the number of mobile phone users in this country is huge. For
example, insurance firms, restaurants and health-care companies are sending out
advertising messages through SMS and MMS to mobile phone users.

Using the permission-based mobile advertising model, Maxis offers myDeals

which makes mobile advertising available to all customers with various models
of mobile phones if they permit the advertisers to send them advertising
material. Maxiss clients include Malaysia Airlines System (MAS), Colgate
Palmolive, Panasonic and BMW.

Now, let us look at the term mobile portal and the definition provided for it.
120 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

A mobile portal is a customer access and interaction channel, optimised for

mobility that aggregates and provides content and services for mobile
users.

For example, MASs MHmobile at http://flymas.mobi, allows passengers with

the following privileges:
(a) Book and pay the flight with a credit card;
(b) Share the itinerary on social media;
(c) Check-in with one click access;
(d) Choose a preferred seat;
(e) Get a mobile boarding pass;
(f) Check real-time flight status and latest arrival/departure times;
(g) Find out contacts of MAS offices and the way to get there with Google
maps;
(h) Check any lost baggage status; and
(i) Enjoy exclusive mobile deals.

While, Go2HomeStay.com provides Homestay Mobile Portal for information on

homestay directory, theme of the month and contest details via video calls.
Media Prima launched a mobile content portal hosted at http://mobsta.my to
offer ringtones, games, wallpapers, animation, music streaming, mobile comics,
news and TV highlights, among others.

ACTIVITY 4.6

(a) Access Maxiss website and find out more information on

myDeals.
(b) Will you permit the advertisers to send promotional messages to
you via your mobile phone? State your reasons.
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4.2.3 Mobile Entertainment

Mobile entertainment is available on many mobile devices such as the following:

(a) Music and Video

Users may download music and video from the Internet to their PC and
then transfer through the USB cable, Bluetooth or Wi-Fi to their mobile
devices. Users may directly transfer to their mobile devices such as
smartphone and MP3 player. Examples of companies which provide such
services are Apple iTunes, Microsoft Zune and Amazon MP3.

(b) Mobile Games

Mobile gaming is one of the largest mobile applications. With more than 2
billion mobile phone users worldwide, the number of potential mobile
gamers is substantially larger than the market for other platforms, such as
PlayStation and GameBoy.

This phenomenon has resulted in an increasing number of companies

involved in creating, distributing, and running mobile games. According to
IBTimes.com, there will be 4.6 billion mobile applications downloaded by
the end of 2010. Examples of popular mobile games include Microsoft Xbox
360 S and Apple App Store (>250k applications).

(c) Mobile Sports

Mobile sports allow sports enthusiasts to keep themselves up-to-date with
information about the performance of their favourite athletes or teams.
Sports scores, statistics and news are available from Yahoo! Sports for
Mobile and ESPN Mobile Web (http://espn.mobi).

4.2.4 Location-based M-Commerce

Location-based m-commerce (l-commerce) refers to the use of GPS-enabled devices
or similar technologies to locate a customer and deliver products and services
based on the customers location. L-commerce offers benefits to both merchants
and customers in terms of safety (identification of exact location during
emergency), convenience (ability to locate nearby desired destination for products
and services) and productivity (time optimisation within close proximity).

L-commerce provides services to customers based on five key factors as follows:

(a) Location
Determine a position of a person or object (i.e., car).
122 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

(b) Navigation
Plot a route from one location to another.

(c) Tracking
Monitor the movement of a person or object.

(d) Mapping
Create maps of specific geographical location.

(e) Timing
Specify the precise time at an exact location.

Let us look at the example shown below to enhance our knowledge on l
commerce.

In May 2010, you, as the Mayor of Starbucks on Foursquare, received

location-based advertising via your mobile device when you checked-in.
The deal offered a $1 discount on a Frappucino. The special deal greeted
you with this message: As mayor of this store, enjoy $1 off a NEW
however-you-want-it Frappuccino blended beverage. Any size, any
flavour. Offer valid until 6/28.

Source: http://www.fabsugar.com/Whats-Your-Frappuccino-
Coffee-Drink-Moment-7325978

The underlying technologies behind l-commerce are the following:

(a) Global Positioning Systems (GPS)

GPS is a system based on a worldwide satellite-based tracking system that
enables users to determine exact position of an object anywhere on the earth.
 TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE W 123

(b) Geographical Information System (GIS)

GIS is a computer system capable of integrating, storing, editing, analysing,
sharing and displaying geographically referenced (spatial) information. GIS
data visualisation technology can integrate GPS data into digitised map
displays.

ACTIVITY 4.7

Discuss on the following:

(a) The applications of m-commerce in various areas; and
(b) Thesecurityandethicalissuesinmcommerce.

You can visit the following websites to get more information on GPS application:

x http://www.geocaching.com
x http://www.trimble.com/gps

4.3 MOBILE ENTERPRISES

Mobile devices and technologies are widely used within an organisation for
intra-business applications; specifically on work nature that requires employees
to be on the move when performing their job duties such as sales, retail,
operations, dispatch, maintenance and repair in remote sites. Let us just
concentrate on the following two duties performed by the business personnel:

(a) Sales Force Mobilisation and Automation

Many sales personnel are required to travel to meet the clients outside of
the office. Mobile devices like laptops and PDAs allow the sales personnel
to demonstrate new products and check inventory and maintain a good
relationship with the customers. Mobile devices can keep sales personnel
better informed about new product launches, product information, pricing
updates, order status, inventory level and delivery schedule.

Sales personnel are equipped with the up-to-date information when it is

time to close a deal. This will also portray a good image to customers.
124 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

Orders are able to be recorded in real time which will benefit business
operation and delivery scheduling and reduce data entry error later.
Common mobile devices used by sales personnel include Palm Treo and
RIM Blackberry.

(b) Job Dispatch

Another group of mobile employees are those involved in delivery and
dispatch services such as transportation, utilities, field services, health care
and security. Mobile devices assist in assigning jobs to mobile employees
and provide them with detailed information about their task.

For example, AirIQ, a Canadian firm, provides GPS locating and

management solutions for commercial fleets, service fleets, construction
equipment fleets and consumers. AirIQs Online system which combines
Internet, GPS, mapping and intelligent technologies is used by truck service
company to improve their workforce efficiency.

You can visit the following website to get more information on Mobile
operations (Driscoll's Berries case study):

http://www.silicon.com/white-papers/view/mobile-and-wireless/

4.4 SECURITY AND ETHICAL ISSUES IN M-

COMMERCE
Do you know that similar to desktop computing environment, mobile computing
also suffers from security threats? As the functionalities and capabilities of
mobile devices increase, the threat of attack from malicious code will certainly
increase.

Let us look at the examples of malicious attacks as follows:

(a) In 2004, Cabir becomes the first known worm which spreads through
mobile phone. Cabir only runs on series 60 Symbian mobile phone;
(b) Brador, which runs on Windows CE and Windows Mobile; and
(c) Red Browser, a Trojan horse which affects smartphone running on Java
environment.

The unique features of mobile computing environment also pose security

challenges to m-commerce. The open-air transmission of signals across multiple
networks creates opportunities for security threats. Smartphone and other mobile
 TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE W 125

devices are easily lost and stolen because of their small size. A lost or damaged
device is a security threat because of the loss of any stored data and device
settings.

In general, many procedures, policies, processes and technology used for e-

commerce security also apply to m-commerce security such as password,
encryption, and education. However, there are also unique security measures for
m-commerce, for instance:
(a) SIM-based authentication for mobile phone;
(b) Wireless tether to prevent the theft of mobile devices; and
(c) Built-in Wi-Fi security system known as Wired Equivalent Privacy (WEP).

The increasing use of mobile devices in workplace raises new ethical, legal and
health issues. Field service workers who work remotely could result in a
reduction in organisational transparency. It is also difficult to separate business
and personal work and life by using the same mobile phone for both occasions.
Health issues such as health damage from cellular radio frequency emissions and
cell phone addiction have yet to be proven but received much attention from
various parties.

M-commerce also suffers from technological barriers such as:

(a) The small size of most mobile devices has limited usability in terms of data-
input screen, storage capacity and access speed;
(b) In the local context, some mobile service operators are unable to provide
transmission bandwidth and stability of services as promised; and
(c) Some operators even turn offline soon after it was launched. This situation
has definitely affected the users who signed up their services and the
subsequent adoption of new technologies in future.

You can visit the following website to get more information on M-commerce
security: http://www.cto.int/
126 X TOPIC 4 WIRELESS TECHNOLOGY AND MOBILE COMMERCE

x Wireless computing environment consists of the various components such as

hardware (mobile devices), software (operating systems and application),
and wireless telecommunication networks.
x Bluetooth technology is used for short range wireless communication within
a room in a personal area network (PAN).
x IEEE 802.11b and IEEE802.11g are the two commonly used Wi-Fi protocols in
home and office respectively.
x WiMax (IEEE 802.16) is a type of wireless metropolitan area network
(WMAN) that has the coverage of up to 50 km.
x 3G is the current wireless wide area network (WWAN) technology and the
development of 4G is underway.
x Common m-commerce applications include in the areas of financial services,
shopping, advertising, content provision, entertainments and location-based
services.
x M-commerce applications are also used within organisation for employees
who are required to travel or on the move, such as sales, dispatch, field works
and maintenance and repair.
x Similar to brick-and-mortar commerce and e-commerce, m-commerce also
suffers from security threats and deals with ethical, legal and health issues.

Location-based commerce Personal digital assistant

M-commerce applications Smartphone
Microbrowser Wi-fi
Mobile devices WiMax
Mobile operating system Wireless communications
Mobile portal Wireless computing
Personal area Wireless wide area