The Potentially Biggest M-Commerce Obstacle: Success

Written by Evan Schuman
September 6th, 2009

With all of the various reasons why M-Commerce has gone almost nowhere with major American retailers thus far, AT&T and Apple—especially AT&T—are illustrating yet another. The M-Commerce movement may prove to be the latest corporate example of “Be Careful What You Wish For.”

Consumer media have been filled with reports this month of major problems with iPhone 3G performance, illustrated by dropped calls, extremely slow connections and a generally unpleasant experience, especially in places where—ironically—the iPhone is most popular, such as New York City. (This New York Times piece is a great example.)

The culprit: The extreme data demands of customers using the newer iPhone is overwhelming AT&T’s network.

If Apple does replace AT&T as its exclusive iPhone carrier—as it’s reported to do next year, when it’s contract with AT&T ends and it may allow several carriers to support the iPhone—there’s another delicious irony likely.

AT&T iPhone customers who have grown furious at AT&T may leave in large numbers when other carriers become available. When that happens, much of the intense demand will be lifted from AT&T’s network, causing their network to become much more responsive.

In other words, a large exodus of iPhone customers may be the exact prescription for making the iPhone experience of those who remain much more pleasant. Here’s more irony: If one other carrier becomes seen as the most desirable package, the additional iPhone customers could easily bring their network to a crawl. How’s that for sweet AT&T revenge? The customers who stay will get better performance and those who leave will suffer as they did before.

But what does any of this have to do with M-Commerce? A lot. The cause of the AT&T problem is that consumers are treating these phones as small desktop systems. They are actually trying lots of streaming full-length movies, navigation services, housing all of their E-mail (with huge attachments) along with thousands of audio and video files.

That’s exactly how Apple has been pushing the iPhone so they can’t really complain that customers took them seriously. Retailers are likely to be in the same boat. If they finally get around all of the technical and logistical hurdles of M-Commerce, they will be trying to get millions of consumers to interact with their sites—via their phones—and see product lists, read reviews, watch multimedia demonstrations, interact with social sites, download PDF instruction manuals and even ask their peers for feedback on their shopping choices before consummating those purchases.

That’s all great, but—if successful—will it turn the Home Depots, Walmarts and Targets of the world into examples of what may become known as “The AT&T Factor”?


One Comment | Read The Potentially Biggest M-Commerce Obstacle: Success

  1. Collin Says:

    When the iPhone went to Europe it was cross-carrier compatible from the beginning. As a result what you have seen is an explosive growth in the number of users in places like France where iPhone is almost 40 percent of the cell phone market. I believe that we can expect the same things here. As we see the number of smart phone users explode, M-Commerce will become a staple of everyday life and carriers are going to have to work to keep up.


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