| 2001-05-25 2 new studies shed a sobering light on the future of mobile commerce and 3G wireless technologies. Just last year, it seemed that one study after another highlighted the bright future of the wireless industry. Take, for example, the following: The Council of Economic Advisors estimated that the annual consumer benefits of third-generation wireless would be between $53 and $111 billion. IDC predicted that more people would access the Internet with wireless devices than with PCs by the end of 2002. Strategis Group reported that revenues from mobile commerce would reach $5.7 billion by 2004. And Cahners In-Stat Group predicted 1.3 billion wireless Internet users by 2004. But in today's more sober economic climate, it might not come as a surprise that forecasters have begun to change their tunes. Two recently published studies about the future of mobile commerce and 3G wireless technologies indicate the future isn't as bright as analysts had once predicted. In a study released last Friday titled "A Rude Awakening for WAP Dreamers," Chicago-based management consulting firm A.T. Kearney highlighted the slow adoption of m-commerce with figures that are probably nightmare material for m-commerce execs at companies like Qpass and 724 Solutions. Researchers surveyed more than 1,600 mobile phone users throughout the U.S., Europe and Asia and found that only 12 percent said they intend to engage in m-commerce transactions. That's down from 32 percent just one year ago. And less than 1 percent have actually made any purchases with their phones in the past year. The picture in the U.S. alone is even bleaker, according to the report, which suggests that consumers are simply not convinced of the advantages of m-commerce. Just 3 percent of domestic users said they intended to use their cell phones to make purchases, down from 34 percent a year ago. Seamus McAteer, a senior analyst at Jupiter Research, points to Amazon.com's recent decision to scale back its mobile commerce initiative as a sign that wireless application protocol is increasingly looking less attractive to mobile content providers. "Portals are wasting money on bidding to own a piece of WAP homepage real estate," he says. The outlook for 3G – which promises a future of high-speed, always-on mobile Internet connectivity, something the m-commerce sector is banking on – is not much brighter, according to a Cahners In-Stat report released late last month. The study predicts bleak short-term prospects for the high-speed wireless technology and notes that though carriers invested $8.5 billion last year on 3G technology, the services this year will compose just 4.7 percent of the worldwide wireless market. "3G is not for those with weak hearts or shallow pockets," In-Stat analyst Ray Jodoin says. It feels like a case of "too little, too late," but at least the current crop of analyst studies are starting to sound a bit more down to earth. According to Ken Hyers, In-Stat senior analyst: "Much of the hype surrounding m-commerce, from potential revenue to the number of people that will become m-commerce users, is just that – hype."
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