EBay on Wednesday launched a new wireless service that will let avid auction users bid in real-time.
The online auctioneer’s 46 million users now can receive alerts on cell phones and other wireless devices with “Wireless Rebidding for eBay,” a service offered by startup communications software provider InPhonic.
For US$2.99 per month, on-the-run users can keep track of auctions with “outbid” notifications sent to their mobile devices. Users can instantly up the ante by replying to the message. The first month’s subscription is free, according to the company.
What’s the Big Deal?
EBay’s first round of wireless services — called eBay Anywhere — launched about two years ago but met with a lukewarm reception. While the “Wireless E-Mail Alerts” and “eBay Alerts” functions transmit outbid and end-of-auction notifications via cell phone, the services do not allow users to rebid.
Analysts said they expect the real-time capabilities of Wireless Rebidding will receive a warmer welcome from online auction fanatics.
“The ability to access content with a wireless device is only so valuable. Often, the user will want to act on that information,” Yankee Group senior analyst of wireless and mobile services Adam Zawel told the E-Commerce Times. “The main attraction of Wireless Rebidding is that ability to transact.”
How It Works
Wireless Rebidding works with any digital cell phone that has two-way text messaging capability, also called short message service (SMS), or any Internet-ready phone that has a compatible WAP (wireless application protocol) plan.
The new service works with all six major U.S. wireless carriers, and notifications typically are sent within two minutes, according to eBay. Notification consists of a text message that reflects the minimum bid at the time the user was trumped.
Users can place a new bid by replying to the message and entering a mobile pass code. EBay then sends another text message to assure the user that the bid has been confirmed.
Pushing Wireless
One of eBay’s goals with its latest wireless play is to stay ahead of its competition.
Zawel said the company’s move is a sound one. “Wireless access has proved to be a competitive advantage in other industries, like retail brokerages,” he noted.
Zawel pointed to early wireless adopter Fidelity. Even though the majority of Fidelity customers did not sign up for the company’s wireless service, some of its highest-value customers did. The result was a lower churn rate and higher new-customer acquisition.
Yankee Group data for the United States shows that although nearly 20 million devices can access the wireless Internet, fewer than 10 million actually use the services on a regular basis.
Still, analysts said, eBay’s mobile initiative is smart business. The number of wireless Internet users is expected to reach 100 million by 2005, according to Gartner Dataquest.
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This eBay/Inphonic partnership may be a failure in the making.
First of all, I’m a devoted eBayer, but I AM highly skeptical – if not downright saddened – by this Inphonic solution. Lack of actual market demand and usability are two issues that will hinder the growth of this "wireless rebidding" service.
Let’s do some #s first. Let’s break it down like this.
a) 46 mm est. eBay members
a.5) of 46 mm eBay members, how many are Americans?
b) US mobile penetration % = 45%, so roughly 20.7 mm of them have a wireless device
c) then u have to narrow the 20.7 mm figure even further
d) of 20.7 mm how many are text-enabled devices
e) of that figure, how many people are aware of texting
f) of that figure, how many actually texts
g) of that figure, how many eBayers "buy from the site one to three times a month"
The bottom line is this, Mr. Steinberg of Inphonic is praying that "5 percent to 10 percent" of eBayers will use this to make the arrangement "financially viable". So how many of the 46 mm are really dedicated members – ones who shop 1 to 3 times a month? Let’s optimistically place that at 5 mm (which I still think is too high), 5 to 10% of 5 mm is only 250,000 to 500,000 – a far cry from the sort of wishful thinking on this service. All this contributes to the fact that if not a lot of people will use the service, it doesn’t matter how much you charge for it.
That "notifications typically are sent within two minutes … reflects the minimum bid at the time the user was trumped".
This is a huge problem. Two minutes in eBay time can mean a lot of things – especially at the end of an auction. For example:
a) by the time u get the outbid notice and rebid with a higher price, someone might have already placed a bid higher than your rebid price
b) at the end of an auction, while different people are trying to win the auction with last-ditch bids, the user might be bombarded with notification messages
c) worse, due to the inherent latency problem in mobile networks, the user may receive messages OUT OF ORDER – thus generating even more chaos and confusion.
These are just two aspects of this story that should be brought to your attention.
Best,
Sin Hang Lai