Study: Mobile commerce to remain a niche

Although the United States has the largest base of cell phone users in the world, Internet-capable wireless phones will account for less than 2 percent of online shopping in the country by 2006, according to a study released this week by Jupiter Media Metrix Inc.

Less than US$4 billion in shopping and travel will be conducted on Internet-capable mobile phones in the United States by that time, New York-based Jupiter said. But shopping-related content on mobile devices will influence transactions online via PCs and off-line at traditional brick-and-mortar stores -- sales that will be valued at $39 billion in 2006, Jupiter analysts predict.

"The key recommendation is that real commerce opportunity here isn't so much for companies online," but for companies such as Wal-Mart Stores Inc. and Kmart Corp. to alert customers of what they may want to buy in the stores, said Joe Laszlo, wireless analyst at Jupiter.

According to Jupiter's report, consumer interest in purchasing items using a wireless device is not a priority, with only 7 percent expressing interest in conducting transactions via a wireless phone. Cost of wireless access is a concern for consumers who already buy goods and services online, the report stated. Security also is a concern, Laszlo said.

Mobile commerce will be driven by a desire for instant gratification, Jupiter added.

U.S. mobile merchant revenues are expected to total only $22 million in 2001 and be driven largely by occasional sales of entertainment and airline tickets, flowers and other timely gift items.

To boost mobile commerce, Jupiter recommends that merchants and carriers do the following:

-- Encourage browsing for price comparison, product reviews, store locator, and item availability.

-- Take common-sense precautions pertaining to credit card security.

-- Focus on voice capabilities of wireless phones in the short term.

Jupiter's report is based on a survey of 2,076 people with mobile devices.

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