Is the WAP Bandwagon a Gravy Train?

May 2000

Should ecommerce sites invest in serving wireless application protocol (WAP) customers?

Despite all the excitement, not everyone should be delivering services for mobile phones today. If ubiquity, timeliness, or communication is the essence of your business, you should be investigating applications for mobile phones. If you're in the business of content or commerce, you may be better served by waiting for the next generation of wireless access devices.

Should ecommerce companies invest in services for mobile phone users? A great deal of excitement surrounds WAP these days. Wireless carriers such as Sprint PCS are promoting their "Web" services heavily. America Online (AOL) recently agreed to pay Sprint PCS for the top spot on its Wireless Web menu. Increasingly more sites are announcing WAP-enabled versions.

WAP is a genuine phenomenon. By mid-2001, IDC expects that nearly 100% of mobile phones sold in the United States will be WAP enabled. By 2003, U.S. mobile phone subscribers with WAP capability will number 93 million (see Wireless Access to the

Why Is the Market Accelerating?

Wireless carriers are investing more heavily than ever in providing data services to their customers. They see this as an opportunity to increase their revenue per subscriber, cover their high fixed costs, and contain ever-increasing churn rates.

Handset manufacturers are moving toward making all their handsets WAP capable. Combined with the carrier investments and high turnover in handset ownership, this means that most mobile phone users will soon have the ability to access WAP pages. Big portals, including AOL, Yahoo!, MSN, and Excite are offering their customers access to their calendars, address books, email, and other data via WAP. This is increasing consumers' awareness of WAP.

What's Inhibiting Consumers' Adoption of WAP?

Certain market forces and technical limitations will hold back massive adoption of WAP for ecommerce in the near term:

• Mobile telephones are poor transaction terminals. The screens are too small, and entering text using a telephone keypad is difficult. Phones that are optimized for the Web are too big for most users' tastes. And handhelds that can perform as mobile phones haven't been tested in the marketplace.

• Consumers don't want WAP yet. We asked mobile phone users how interested they were in accessing the Internet over their cellular/PCS phones, and 75% said they were very uninterested. Another 7% were merely uninterested.

• Mobile carriers want to be more than pipe companies. They expect Internet growth rates while fighting the commoditization and low prices that accelerated the growth of the Net.

• WAP is slow. Considering the small amount of information displayed and the transmission speeds of up to 19,200 bits per second, WAP pages take a long time to display.

• Mobile phones are a new medium, not a new display device.

Providing WAP access to your services will require rethinking not simply your pages but your entire site.

Cutting Through the Hype

You will hear a number statements, some more true than others, made about wireless Internet access:

• There are/will be millions of wireless Internet users. Wireless isn't WAP. Most of these people are using their cell phones to connect their laptops to the Net. Beware of mobile commerce (mcommerce) estimates that don't tell you what devices they're counting.

• Millions of people are/will be accessing the Net via phone. Are they talking about active users or about people with WAP- capable handsets?

• Everybody in Europe is doing it. Europeans (especially in Finland) are heavily using short messaging service (SMS) to chat, send email, and access information, but no data exists to show Europeans are accessing Internet pages via WAP in great numbers.

• They'll love it in Japan because they don't have computer access to the Net. Japan's wireless industry is limited by proprietary technologies, high pricing, rapid obsolescence, and very high churn rates. A WAP phone is not a substitute for a Net- connected computer; it's something else altogether. Finally, 20 million Japanese are on the Net, and access is becoming more affordable.

• Don't judge the future of wireless access using today's devices and protocols; future offerings will be much more compelling. You may want to wait until the protocols are written and the devices that use them have been shipped

Who Should Invest in WAP Now?

• You've got users' personal information. WAP is an ante if you offer address book, calendar, or other personal information management services. Ubiquity is the reason people store personal information on the Net, and WAP enables ubiquity.

• Time is critical. Stock brokers and news alert services should be on WAP. While a large percentage of stock transactions may never take place via WAP, brokerage customers will demand to execute trades whenever and wherever they want.

• You're selling communication. Mobile phones are communication devices. If you offer email, chat, voice over IP, or other services that connect people, WAP extends your reach. SMS is the one big nonvoice success story in mobile phones.

• Your application is mobile. If you offer maps, directions, or yellow pages, you should be working on WAP. What Should You Do Today?

• See for yourself. If you haven't already, get yourself a WAP- enabled phone and use the current services so you can understand its power and limitations. Sprint PCS, Verizon, and AT&T Wireless all offer various handsets, services, and rate plans.

• Invest in content management. Whether you go wireless this year or not, you will need to support multiple types of access devices in the future. This will prepare you for not only WAP but also a multitude of non-PC access devices.

• Consider your options. Active WAP users number in the thousands. There are more than 20 million Web users each in Germany and Japan. Instead of translating your pages into WAP, why not translate them into German or Japanese?