Developing a Model to Study Advanced Mobile Phone Services Adoption

1. Developing a Model to Study Advanced Mobile Phone Services Adoption En Mao & Mark Srite School of Business Administration University of Wisconsin-Milwaukee (Co-Authors: Jason Thatcher & Onur Yaprak, Clemson University) OASIS WORKSHOP 12/12/2004, 11:30AM

2. Overview • Introduction & Background • Research Model & Hypotheses • Method • Data Analysis • Results • Conclusions & Implications

3. Introduction & Background • Mobile communication technologies have penetrated consumer markets throughout the world. • Traditional versus New forms of mobile phone services • Juniper Research estimates that the global revenue of m-commerce will reach $88 billion and phone-based retail point-of-sale (POS) revenue to reach $299 million by 2009

4. Research Question • What factors affect the adoption of mobile phone services?

5. Background • As of September 17, 2004, there are more than 169 million mobile phone subscribers in the U.S. • More than 43% of the current mobile phone users will replace their phones within a year, which translates into close to 100 million new mobile phones to be adopted in 2004. • Wireline-to-wireless number portability implemented since November 2003 as part of the FCC's Wireless Local Number Portability (WLNP) mandate is making the mobile phone an increasingly prominent communication device in U.S. households. • At the end of 2003, 7 million U.S. consumers depended on their mobile phone solely for their communication needs . • About14.4% of consumers use their mobile phone as their primary phone in 2004 and of the remaining landline owners, 26.4% would be willing to permanently switch to mobile phones. • Currently, only 2% of the mobile phone owners in the U.S. are using the e-payment function of their mobile phones.

6. Mobile Phone Efficacy Perceived Usefulness H6 H8 H1 H10 H3 H7 Personal Innovativeness Perceived Ease of Use Intention to Use H9 H2 H4 PBC H5 Price Accessibility Research Model

7. Research Constructs • Technology Acceptance Model - TAM • Perceived Usefulness - PU • Perceived Ease of Use - PEOU • Behavioral Intention to Use - BIU • Individual Factors • Mobile Phone Efficacy • Personal Innovativeness - PI • Perceived Behavioral Control - PBC • Price • Accessibility

8. Hypotheses • H1: Perceived usefulness positively influences an individual’s intention to use advanced mobile phone services. • H2: Perceived ease of use positively influences an individual’s intention to use advanced mobile phone services. • H3: Perceived ease of use positively influences the perceived usefulness of advanced mobile phone services. • H4: Price influences intention to use such that higher prices result in lower intentions to use advanced mobile phone services. • H5: Accessibility influences intention to use such that higher accessibility results in higher intentions to use advanced mobile phone services.

9. Hypotheses Continued • H6: Efficacy positively influences the perceived usefulness of advanced mobile phone services. • H7: Efficacy positively influences the perceived ease of use of advanced mobile phone services. • H8: Personal innovativeness positively influences the perceived usefulness of advanced mobile phone services. • H9: Personal innovativeness positively influences the perceived ease of use of advanced mobile phone services. • H10: Personal innovativeness positively influences advanced mobile phone services efficacy.

10. Research Method • Students enrolled in business coursework at a large mid-Western university participated in our study. • 63.5% response rate • Instrument was administered via a web questionnaire to ensure completeness. • The web survey approach was selected because students from this particular university had utilized various web-based systems in school and were familiar with web surveys.

11. Demographic Statistics

12. Data Analysis • Partial Least Squares was used to assess Validity and Reliability • Measures were found to have acceptable psychometric properties • To assess internal consistency, PLS researchers typically calculate a block of indicators’ internal composite reliability (ICR) and average variance extracted (AVE) (Chinn, 1998). Interpreted like a Cronbach’s alpha, an ICR of .60 is sufficient for research (Fornell and Larcker, 1981). • The AVE measures the variance captured by the indictors relative to measurement error and is shown, for this study, in bold in Table 2 on the diagonal. • To use a construct, the AVE should be greater than .50 (Fornell and Larcker, 1981). • Also, to evaluate discriminant validity, the AVE may be compared with the square of the correlations among the latent variables (Fornell and Larcker, 1981). • The correlation among indicators of a construct should be greater than between a construct and any other construct. Values reported in Table 2 demonstrate acceptable reliability and validity for the constructs

13. Reliability

14. Results

15. Summary

16. Implications for Research • First, a promising model was developed for understanding the adoption and use of advanced mobile phone services. • Second, the importance of perceived usefulness to behavioral intention was validated in the context of advanced mobile phone services use. • Third, self-efficacy and personal innovativeness were validated as key antecedents of perceived usefulness toward advanced mobile phone services.

17. Implications for Practice • In developing programs to improve perceived usefulness, managers and marketers must recognize the importance of self-efficacy, innovativeness, and perceived ease of use on perceived usefulness. • Given that self-efficacy, innovativeness and perceived ease of use take time to improve, companies need to invest in long-term programs that target on these individual characteristics. • One means to do so, is to offer potential customers training that increases their efficacy levels as well illustrates how mobile phone features may be applied to business or personal uses.

18. Questions