Report: Wireless E-Commerce Taking Hold in U.S.

While Europe is widely believed to have a vast lead over the United States when it comes to wireless e-commerce, or “m-commerce,” new data from market analysis firm Datamonitor suggests that the gap is closing rapidly.

In a report titled “mCommerce Infrastructure in the U.S.,” the company predicts that the market for wireless e-commerce solutions in the U.S. will grow 1,000 percent to $1.2 billion (US$) by the year 2005.

In order to reach that level, however, the U.S. must overcome a number of hurdles that do not exist in Europe, including the lack of a single mobile telecommunications standard, low wireless device penetration across broad stretches of the country, high prices, erratic service and the lack of investments in third generation networks.

“M-commerce solutions consist of the hardware, software, systems integration and professional services necessary to implement a mobile business channel,” said Datamonitor analyst Sohrab Torabi. “Until the current market for these solutions has fully matured, m-commerce in the U.S. will lag behind Europe.”

Clearing Hurdles

Datamonitor also concluded that the lack of security when using wireless devices remains crucial to whether consumers will decide to use wireless devices to make purchases online. Ultimately, it concluded, all these pitfalls facing mobile commerce in the U.S. will give way to a number of overriding factors.

The fact that the American market can operate in a single language, English, gives the the U.S. a significant advantage over Europe, which features a mixture of languages that intersect at crossroads and borders throughout the 15-member European Union, Datamonitor said.

The amount of intellectual and commercial talent in the U.S. as well as the greater amount of country-specific content and vendors that can dive into an expanding m-commerce market also benefits the United States, the report said.

Wireless Optimism Not Pervasive

Of course, many observers believe that wireless commerce will never realize the lofty heights that some forecast for it.

Naysayers feel average retailers will not be able to successfully provide a visual image of their products via a wireless device. These retailers constitute a major portion of the market.

Yet other industry analysts say it is likely that the financial services industry and other time-sensitive industries like the online auction industry will benefit enormously from wireless commerce.

Many U.S. companies positioned in those industries have already begun to make their move. Charles Schwab recently joined Ameritrade, Fidelity, DLJ Direct and other online brokers in introducing wireless trading.

Meanwhile, auction giant eBay is set to offer wireless access in Germany and the UK this summer, keeping pace with Yahoo!, which already offers the service.