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Believe the m-commerce hype

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A new generation of dotcom millionaires will be created when mobile Internet - WAP, in other words - and third-generation (3G) cellular network vendors go public, analysts at BRC and EPS of London predict in reports released this week. If the recent activities of venture capitalists are any indication, BRC and EPS may be right. With early stage investments of these proportions, startup technology firms never had it so good. A sampling of recent venture deals involving private European firms in the WAP and mobile data business hints at IPO valuations in store.

  • Mobilechannel.net (Geneva), a startup less than a year old received $20 million from investors this year.
  • US-based Cellpoint Inc acquired two-year old Swedish Unwire (14 employees) for $80.5 million in February.
  • Durlacher Corp Plc paid $2 million for a 6.6 per cent stake in the Finnish mobile communications company WapIT.
  • Firing the frenzy are predictions such as those in Datamonitor's most recent report, which forecasts consumer spending (on goods only) via m-commerce to be worth $16.6 billion by 2005. Datamonitor also warns that "a number of short-comings associated with WAP will make it a merely transitional technology, serving only to stimulate demand for m-commerce products, resident until more advanced protocols arrive". The Datamonitor report also says that the MExE (Mobile Execution Environment), which is based on Java technology, will likely replace WAP and will be incorporated into third-generation mobile devices that have the processing power to utilise it. America could still win One of the most interesting points of Datamonitor's report is its potentially European mobile-Internet-bubble-bursting comment about the US and its potential for mobile Internet. Europe is generally accepted as being more advanced in digital cellular, providing fertile ground for the next generation mobile Internet vendors and service providers - it is superior because of the widespread acceptance of GSM and the resulting "favourable pricing structures, increased competition, greater quality of service; provision of value added services and declining costs". However, Datamonitor warns, the m-commerce focus may shift back to the US for the following reasons:
  • The advantage of single language domination in the US makes it easier to develop application content and internal services for a large population, an advantage the European market cannot have to such a great extent.
  • Internet penetration is very high in the US, as is the propensity to purchase products and services on line.
  • Where to find upcoming mobile Internet millionaires? Look for companies that heed the market research from Ovum (see Don't believe the m-commerce hype) and Datamonitor, reminding mobile commerce players to not get carried away with the wonders of technology, but rather tap into mobile consumers' needs by optimising services and applications for the mobile platform. ® Related Story Text me, Cindy (my Bluetooth Baby)

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