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M-commerce will be worth USD40bn by 2009
08-10-2004
by Matthew Clark

The growth of so-called micropayments will drive a massive rise in the sale of goods and services over mobile phones, a report says.

Juniper Research said in a report released on Thursday that in five years' time, retailers will ring up USD40 billion in sales from customers who will use mobile phones to spend cash on everything from cinema tickets to hourly car parking.

The purchases consumers will make will mainly consist of low-priced items, or what the industry calls micropayments. In Europe, the average European will make approximately 28 transactions a year via mobile phone by 2009, with the average cost of each transaction in Western Europe expected to be worth approximately USD3.

It's important to note that Juniper's USD40 billion figure excludes already popular m-commerce products like mobile phone ringtones, Java games, wallpaper and screensavers. This separate m-commerce market segment -- known as mobile entertainment -- will be worth USD8 billion in Western Europe in 2008, according to another research firm, IDC.

For its part, Juniper says that consumers making non-mobile entertainment buys will spend the bulk of their cash, or about USD39 billion by 2009, on low-cost tickets such as cinema tickets or car parking vouchers. Just USD299 million will be spent on Point of Sale (POS) mobile transactions in five years' time.

"Mobile commerce is slowly starting to happen, driven by the demand for ringtones and games but also increasingly music downloads," said report author Marc Ambasna-Jones. "Other applications too will start to emerge, such as ticketing, and these are applications that mobile users can understand as they start to explore more uses for their increasingly powerful handsets."

"The key for m-commerce growth is simplicity," Ambasna-Jones added. "Will it be easier to use than a credit card for example? Can it even be more convenient than cash? Ultimately the success or failure of mobile commerce, either macro or micro payments, will come down to this."

Juniper also said in the report that the market will be slowed by a lack of global standards and industry players who are merely concentrating on vested interests. The report also noted that RFID and infrared technologies are likely to have a major influence on the future development of devices that allow for payments.