“Charge It” with your cell phone

1. “Charge It” with your cell phone CIS 429 Sarah Hegger

2. Charge-it Main points • Wireless operators, credit card companies, retailers involved • Example: Soda machine • South Korea, Japan, Europe currently using technology • Use of credit cards: Japan- 5.6% U.S. 33% of consumer spending

3. Charge-it Main points • Currently testing cell phone credit card: MasterCard and Nokia • Special chip with user’s credit card information and a radio frequency transmitting circuit • Tap phone on receiving device at check-out cost retailer $80 • Can tap phone even while talking to someone

4. Current Information • 9 million people bought something from cell phone • Mostly men ages 25-34 • 9 million people= 3.6% American cell phone owning public • People concerned with info transmitting over cell phones • April 2007- April 2008 = 73% rise in people visiting shopping/auction site from phone Over 9 Million purchases made by cell phones

5. Current Information (cont.) • In 2005- $50 million spent on marketing via cell phone • Could be $1.5 billion by 2010 Shopping by Phone, on the Move

6. Current Information (cont.) • PrVenueMobile- lets people buy tickets 24/7 from their phones • Usablenet- Sears launched purchase and pickup mobile commerce system • Consumers manage in-store pickup of merchandise from cell phone Buying Tickets with Your Cell Phone

7. Case questions • Do you think this technology as a potential threat to traditional telephone companies? If so, what counterstrategies could traditional telephone companies adopt to prepare for this technology? • Yes, if possible somehow tie the profits to the cell phone company to traditional telephone companies • make some money off it without putting them out of business. • make traditional telephone more appealing to people and possibly cheaper packages then what they already have

8. Case questions • Using Porter’s Five Forces describe the barriers to entry and switching costs for this new technology. • Entry barrier- product or service feature that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and survive • Cell phone company must offer customer an array of services that this new technology will provide. • Switching Costs- are costs that can make customers reluctant to switch to another product or service. • Cell phone companies can monitor what customers buy • after many times of visiting sites they can tailor products to what the customer likes • if they shop else where, there will be a switching cost since the new shopping site does not have a profile of the past’s purchases the customers made.

9. Case questions • Which of Porter’s three generic strategies is this new technology following? • Focused strategy- target a niche market • Targeting the growing market of cell phone users and purchasing products and services from the cell phone

10. Case questions • Describe the value chain of using cell phones as a payment method. • value chain increase the infrastructure of phone companies and improve technology development • payment method can receive/store information from the consumers purchases and send that to the phone company. • more people will engage in this type of payment method.

11. Case questions • What types of regulatory issues might occur due to this type of technology? • people will be skeptical with putting personal information out there not knowing what kind of security protection the company has. • people will find a way to hack into cell phones.