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Cell phone based services

The increasing popularity of cell phone based services is fueling commercial interest in expanding mobile wireless access to a broader range of public services. When cell phone technology went digital it opened up a whole range of possibilities for services other than voice communications. Most cell phone service providers already offer a number of value added features bundled with various service packages. These include such things as, text (SMS) and picture messaging, Internet access (email), downloadable games and custom ringtones, etc. Wireless carriers are now preparing for the implementation of so called 3G, or third generation, cell phone technologies that are capable of higher data speeds and capacity to support such services as streaming video and other high bandwidth applications. Nextel and other top U.S. cell phone service providers are currently upgrading their networks in an effort to provide consumers with wireless broadband services to challenge their DSL (digital subscriber line) and Cable “wired” broadband competitors. Once faster networks are in place, carriers can initiate their plans to sell broadband in areas that cable or DSL providers have overlooked. Other companies see the cell phone as a gateway to a wider range of services including wireless retail or m-commerce (mobile commerce).

Mobile Commerce (cashless transactions and banking)

In Europe, more than 50 percent of parking meter payments in Zagreb, Croatia, are now made via mobile phone data services. Other countries such as New Zealand are evaluating similar parking systems. Last year, Edinburgh Scotland introduced a parking pay system called mPark and more recently in several cities in North America a similar system called Park-Phone-Go by Verrus was introduced. Drivers walk up to the machine and make a phone call using their mobile phone; they are then asked to enter the identification number of the machine they are standing at and the length of stay required. After the drivers answer the machine spews out a ticket which is placed on the car. The whole process is meant to take about 15 seconds to complete. The charge for the parking is taken from a credit card or account of your choosing.

In Helsinki, as many as one-third of all public transportation tickets - subway, tram and bus - are now sold via mobile phones. In Austria, people use mobile data services not only to buy their ski passes but also to insure themselves against breaking a leg. (Payout for those who end up in a cast is E 1,000, or about $1,147). That and other m-commerce services started two years ago in Austria such as buying vending machine cigarettes, paying for taxi and subway rides and purchasing event tickets seem to be resonating with consumers. At a Robbie Williams concert last year in Vienna, 10,000 of the 55,000 concert goers bought tickets via m-commerce, by punching data into their phones.

Japan's mobile operator or wireless carrier, DoCoMo, launched DoCommerce last year which lets i-mode subscribers pay for mobile purchases with Visa, MasterCard or JCB credit cards. The service, powered by technology developed by an Irish company called Network 365, permits any of DoCoMo's 38 million i-mode customers to go shopping at 77 virtual shops without punching in lengthy credit card numbers or memorizing different passwords. Another more recent service offered by this Japanese wireless carrier lets customers use their cell phones as a mobile wallets. DoCoMo's revolutionary new service and smart-card handsets can be used for a variety of unprecedented functions, including train pass, debit card (electronic money), credit card and personal identification card, applications previously possible only with IC-equipped cards.

Last year in April, the Hong Kong mobile operator CSL began the first Verified by Visa implementation over mobile phones. CSL's service provides security during mobile payment transactions by authenticating a Visa cardholder's identity at the time of purchase. Over 90 percent of cinemas in Hong Kong are now linked into the system. In the Philippines, Smart Communications is using technology developed by Finland's SmartTrust to offer an m-commerce system based on a prepaid reloadable payment card. Consumers can top up their phone wallets from their bank accounts. More than 25,000 retail outlets in the Philippines, including clothing stores and pizza restaurants, accept this form of payment.

But most existing payment systems are limited by national borders and the lack of interoperability among phone operators, both in Asia and Europe. However, companies such as Simpay, a consortium formed by Vodafone, Orange, T-Mobile and Telefónica Móviles, aims to create the necessary economies of scale by making it easier for consumers to buy low-priced items, such as downloading MP3 music files, games, maps, video clips or filling parking meters and have it charged to their phone bill, regardless of what technology their mobile operator is using. It would be the platform that would allow all mobile wallets to communicate.

Very recently at the annual Royal Bank of Canada (RBC) Applied Innovation Symposium in Toronto, NCR Corporation demonstrated how it is exploring ways to take advantage of the convergence of automated teller machines (ATMs) and mobile channels like cell phones and Bluetooth technology, to give consumers more convenient self-service banking. Using a Personas ATM, NCR demonstrated how the security of the self-service channel can be increased when SMS transaction confirmation messages are sent directly to the cell phone. An electronic ATM receipt transmitted from the ATM to the cell phone provides real-time notification of transactions. This gives consumers an electronic alternative to the traditional paper receipt and it also promptly alerts them of any unauthorized transactions so that appropriate and preventative action can take place. NCR also highlighted the synergy between ATMs and mobile technology by demonstrating how the ATM can be used as a vehicle for consumers to recharge their pre-paid cell phones and as a top-up facility for cashless payment systems such as an electronic wallet stored on a cell phone.

Unfortunately, using cell phones as electronic debit cards or gateways to banking machines, parking meters or other vending machines has been met with little enthusiasm in North America so far. Ironically, mobile merchants or retailers who travel around selling their goods rely on debit and credit card authentication and transaction processing systems linked by cell phone networks. However, the market is beginning to warm up to the idea of m-commerce with the advent of Internet enabled cell phones, as many people who are used to purchasing goods over the Internet with their computers are equally comfortable using a mobile Internet connection. This is likely to create more interest in Internet banking and other retail services using mobile wireless devices.

Information Applications

A growing number of cell phones are hooking up to the Web for sending and receiving e-mail and for calling up weather reports, stock quotes, movie listings, sports headlines and travel tips. The Yankee Group, a technology research firm in Boston, predicts that by the end of this year, 15 million phones in the United States will be equipped to use the Internet. One of the biggest problems of bringing the Web to cell phones is fitting a page designed for a desktop monitor onto a few-inch-square LCD screen. During the last few years, engineers at the world's telecom firms and their industry standards bodies have been working at the same problem, and so far they've produced software that leaves a lot to be desired. The two main competing methods for accomplishing the same thing so far, WAP and imode, have essentially offered a watered-down version of the Web to phone users. Most of the design features coded in HTML are truncated for the wireless version. But the slightly bigger color screens on smart phones and PDAs, along with a larger allocation of memory in these devices, mean that the phones can now include browsers that display Web pages more accurately with undiluted HTML. Screen size is still an issue but companies such as Opera Software have come up with clever solutions such as structuring the display of information in a vertical format so all the page information is still intact and is accessed by scrolling vertically to read it.

Another information application being developed by researchers at an Intel-financed lab at Cambridge University is a way to replace public information kiosk displays with a cell phone's built-in camera and screen. The technology requires the use of SpotCodes, concentric rings of black-and-white blocks representing ones and zeros much like a bar code. Focusing your camera phone on the code and then clicking any button launches a wireless service, for example, checking an airplane's departure time, downloading product information from a store display, loading a Web page or transmitting an e-mail address and possibly buying electronic tickets from vending machines.

SpotCode is not alone in this new field. Companies like NeoMedia and other scan-commerce entrepreneurs have launched a number of applications in North America. NeoMedia markets a product that lets clean-up workers click with a camera phone on a chemical drum's tag to learn more about what has been spilled. And enthusiasts are using a technology from an Ontario-based company, Semacode, for updates on bus arrivals. When pointed at the code, a camera phone can connect to bus tracking data from a company called NextBus.com. Unsurprisingly, many of the applications revolve around shopping for example, letting potential buyers call up information on a DVD player's technical specifications or check the number in stock. Last year NeoMedia produced an application to demonstrate their technology to telecom executives. It lets a person walk into Barnes & Noble, click their camera phone on a book and then links them directly to the Amazon price. Scanbuy also has a similar application in the works.

Though applications like these are only now appearing in the United States, they have become increasingly popular in Asia over the last two years. Examples in Japan include pointing your phone at printed maps to find the nearest automatic teller machine, getting extra information about animals at an aquarium or training your camera phone on a local market place's produce to determine its origin and freshness. South Korean wireless provider, KTF, recently started a service that gives camera-phone users premium information when they point their phones at the bar code of any of over 400,000 products like books and CD's, for a few cents per lookup.

WiFi Based Services

WiFi products based on the IEEE 802.11 series of standards for Wireless Local Area Networks (WLAN) are primarily aimed at higher data throughput applications for computer networks such as Ethernet connectivity and full Intranet and Internet access. Market data indicates that WiFi has become the dominant WLAN technology on the market. Numerous WiFi enabled products have been developed and there is an emerging market for WiFi “hot-spots”, various public venues such as airports, hotels, coffee shops and malls where wireless networks have been installed to support people with mobile computing needs. The number of people who use Wi-Fi hot spots globally is likely to triple in 2004 according to market research firm Gartner. By the end of the year hot-spot users are poised to rise to 30 million, up from 9.3 million last year, and more than half of notebook PCs used by businesses will have Wi-Fi capabilities. Public services delivered over WiFi links are virtually all Internet based, as WiFi essentially provides a wireless portal to the Web. With a range of several hundred meters WiFi is most suitable for home or in-building applications. A number of companies offering WiFi connectivity take advantage of the limited range to provide localized services. For example, a hotel may offer guests WiFi access through a number of wireless nodes located throughout the premises, which are connected to a server located in the hotel. When clients connect they might be first presented with various customer services offered by the hotel, much like a virtual concierge.

Fairmont Hotels is hoping a pilot project with Hewlett-Packard will lay the ground work for what might mean increased revenue possibilities down the road. Earlier this year Fairmont hotels rolled out wireless-enabled HP iPaq Pocket PCs to its president's club members for use during business and leisure stays. The project is being extended to 41 of the chain's hotels around the world, with 20 locations in Canada. Users can access restaurant reviews, information on attractions, retrieve personal e-mail and surf the Web.

Skype Technologies launched a test version of its Net telephony software for handheld devices this year. The new application is designed for PDAs (personal digital assistants) running Microsoft's Pocket PC 2003 operating system and equipped to handle Wi-Fi wireless transmissions. These devices would be able to use Internet Protocol technology to make unmetered phone calls worldwide. Established telephone companies, spurred by the advent of companies specializing in voice over Internet Protocol (VoIP) technology and offering low or no cost phone calls, also are starting to offer Net calling services. About 11 percent of all voice traffic is classified as VoIP, although less than 1 percent of those calls are initiated on a VoIP phone.

Two major VoIP providers have taken steps to further unwire Net-based phoning, traditionally a service tethered by wires. Vonage, the world's largest commercial provider of voice over Internet Protocol (VoIP) phone services, and commercial hot-spot provider Boingo Wireless said they intend to co-market each other's services later this year. Boingo is working with handset makers to integrate its software into Wi-Fi-ready phones.

Bluetooth Based Services

Bluetooth was designed for personal area networks (PANs), as a means to replace the cables that connect electronic devices. It is well suited to applications such as synchronizing data between PDAs, PCs, printers, input devices and cell phones. It also supports an audio component for wirelessly connected headsets for cell phones.

In 2001, NCR announced its Freedom concept, demonstrating the use of a mobile phone or personal digital assistant to obtain cash from a futuristic egg shaped ATM. With the Freedom concept, mobile devices would replace the magnetic-stripe cards in a consumer's pocket. Consumers type their cash withdrawal requests into their PDA or mobile phone, then point the device at the ATM to get the money. A security pin number, also typed into the device itself, allows access to the account. Although infrared technology is used for the communications link, ATMs could also be adapted to accept Bluetooth technology.

Last year in Denmark, NCR Corporation, AU-System and beamtrust a/s started a pilot project enabling consumers to access a traditional automated teller machine (ATM) using a mobile phone. The live pilot project involved cash withdrawals from three ATMs owned by Spar Nord Bank and Laan & Spar Bank. The Danish pilot was the first time a mobile phone was used to withdraw cash in a live environment rather than a concept model. The connection to the ATM was accomplished using the cell phones infrared technology but NCR stated that the system could also be adapted to accept Bluetooth technology once it comes into more widespread use.

More recently NCR announced that it’s exploring ways to take advantage of the convergence of ATMs and mobile channels, like cell phones and Bluetooth technology, according to a company press release. Using a Personas ATM during NCR's annual RBC Applied Innovation Symposium in Toronto, the company demonstrated how the security of the self-service channel can be increased when SMS transaction confirmation-messages are sent directly to cell phones. An electronic ATM receipt sent from the ATM to the cell phone provides real-time notification of transactions, which also will help keep customers informed of any unauthorized transactions. The release also noted that for the visually impaired, access to the ATM channel is improved by using a Bluetooth connection, which means that audio can be provided directly to a customer's headset, rather than the customer having to plug a headset into the ATM.

RFID Services

At a recent annual Royal Bank of Canada (RBC) Applied Innovation Symposium in Toronto, NCR Corporation demonstrated how it is exploring ways to take advantage of the convergence of automated teller machines (ATMs) and mobile channels like cell phones and Bluetooth technology, to give consumers more convenient self-service banking. One of the demonstrations included the use of a cell phone equipped with an RFID tag to conduct an ATM transaction. No bank card required.

In May of 2003, Nokia and MasterCard launched a trial of RFID equipped mobile phones that let people use their Nokia phones as credit cards. Nokia distributed 500 new phones as well as 1,500 free phone covers that snapped onto existing handset models. The phones and phone covers were equipped with MasterCard's "PayPass" payment technology that lets consumers wave or tap MasterCard credit cards on a reader to charge their accounts, rather than swiping cards through the retailer's magnetic stripe reader. Half a dozen merchants in Irving, Texas participated in the trial, including Chevron, Rockfish Bar and Grill, Jason's Deli, Corner Bakery and Wolf Camera. As part of the trial, participating merchants were able to send advertisements to consumers' SmartCover phones using a short-messaging service.

MasterCard also tested its PayPass technology in Orlando, Fla., in a trial that involved next-generation credit cards rather than the Nokia phones. More than 16,000 cardholders and nearly 60 merchants participated in the trial. MasterCard is developing the technology to increase credit card transactions and replace cash payments in so-called quick-pay retail environments such as convenience stores and fast-food restaurants. American Express has developed a similar payment system, called ExpressPay, which uses a keychain fob instead of a card.

Nokia is also planning to try out a wireless ticket system using similar RFID technology on German buses. Early next year travelers in the city of Hanau, near Frankfurt, will be able to pay for tickets by passing their phone over a smart-card reader already installed on the buses. Nokia hopes the system will reduce queues and make travelling easier. The ticketless trial will start early in 2005 and people will also be able to access transport information and timetables via their phones. Nokia has worked with electronics giant Philips to develop a shell for the mobile phone that will be compatible with Hanau's existing ticketing system.

Microsoft has also decided to take a more formal role in the development of radio frequency identification technology. This year Microsoft announced that it is forming the Microsoft Radio Frequency Identification Council, which held its first meeting in April. Participants in the group include Accenture, GlobeRanger, Intermec Technologies and Provia Software. Microsoft will be providing a "platform" on which the partners can create RFID-based products and services, drawing on its own Windows CE operating system, SQL Server database and BizTalk Server software.

IBM has announced that it will invest $250 million during the next five years and employ 1,000 people in a new business unit to support products and services related to sensor networks. The new unit will also focus on helping businesses exploit sensor networks by, for example, setting up computer systems that use sensor data to quickly identify supply shortages and automatically adjust delivery schedules. IBM's goal is to persuade businesses to view radio tagging as just one element of a new wave of information technology outside of data centers that must be integrated to be exploited. IBM's effort is one of many recent indicators that a drive for widespread adoption of passive radio tags, spurred by Wal-Mart Stores and the Defense Department, is gaining traction. Hewlett-Packard, which has been a leader both in using RFID on its own products and in providing consulting services to others has been working on RFID for two years and now has 350 consultants as well as 1,000 other employees working on various aspects of RFID.

Large retailers, led by Wal-Mart, and major consumer goods companies like Procter & Gamble and Gillette see the tags initially as tools to combat theft and make their supply chains more efficient. Wal-Mart has set a deadline of Jan. 1 for its top 100 suppliers to be shipping goods radio-tagged to specifications developed by EPCglobal, an industry organization (the name is derived from "electronic product code"). Several other retailers, including Albertson's, Target and Best Buy, have supported adoption of the technology.

The technology is also drawing strong interest from drug companies and the Food and Drug Administration, which see it as useful in fighting counterfeiting, monitoring freshness and speeding up product recalls. Boeing and Airbus are working with major airlines to put such electronic tags on all aircraft parts to reduce risks of maintenance errors and help airlines replace faulty equipment more quickly.

INFORMATION SOURCES

Carrier turns cell phones into wallets
By Ben Charny, Staff Writer, CNET News.com
Published: August 9, 2004, 1:57 PM PDT

Mobile commerce, beyond the hype
By Jennifer L. Schenker, International Herald Tribune IHT
Monday, July 28, 2003

Connecting Paper and Online Worlds by Cellphone Camera
By Douglas Heingartner, New York Times
October 7, 2004, CAMBRIDGE, England)

Nextel debuts wireless broadband service
By Ben Charny, Staff Writer, CNET News.com
April 14, 2004, 1:08 PM PDT

IBM readies large RFID push
By Barnaby J. Feder, The New York Times
Published: September 26, 2004, 7:40 PM PDT

http://press.nokia.com/pressreleases.html

http://www.ncr.com/media_information/oct.htm

http://www.wifinetnews.com/

http://www.internetnews.com/wireless/

http://www.microsoft.com/presspass/