Overly Hyped M-commerce Won't Take Off Until 2004 Says The Strategis Group

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March 20, 2001 – Rapid growth in revenues from mobile commerce (m-commerce) transactions is not expected to take place until after 2004, according to a new study released by The Strategis Group. The study, U.S. M-commerce Marketplace, states that while m-commerce revenues are not expected to crack the $150 million mark in 2001, by 2004 revenues will exceed $5 billion. The driver for this m-commerce revenue growth will be increasing availability of high-speed 2.5G and 3G services, as their data speeds and always-on capabilities lend themselves well to the time-sensitivity so critical to m-commerce adoption.

The Strategis Group also sees increasing numbers of m-commerce users as the engine of revenue growth.  While The Strategis Group projects less than 1 million m-commerce users by year-end 2001, the number is expected to reach over 91 million by 2007.  The biggest challenge, says Cynthia Hswe, senior analyst in the North American Wireless Group, is convincing end-users that m-commerce is a complement to e-commerce, not a substitute.

“You’re not going to see people buying large-ticket items, such as cars and furniture, over their wireless phones, because that type of transaction requires time and will be done at the desktop,” says Ms. Hswe.  “Most m-commerce transactions will have a relatively low dollar value, since people will be purchasing things on the go, like movie tickets or wireless games.  So generating a large number of users is crucial if anyone is going to make money at m-commerce.”

The Strategis Group expects entertainment-related transactions to account for over a third of m-commerce revenues by year-end 2001, followed by stock trading and shopping.


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