The Battle for M-Commerce
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Whether by accident or design, Google (NASDAQ: GOOG) is strategically poised to take full advantage of the growing M-commerce market at the expense of its rival, Apple (NASDAQ: AAPL).
M-commerce, or mobile commerce, allows consumers to buy and sell goods and services using their wireless handheld devices, which includes mobile telephones and personal digital assistants (PDAs). But for these devices to work, they must be equipped with some form of Wireless Application Protocol (WAP), and right now Google’s Android is leading the pack in M-commerce technology. Google’s Android phone, equipped with near field communications (NFC), has given it a big lead over their M-commerce competitors, including the iPhone.
How big is M-commerce? M-commerce is projected to reach $963 billion in 2013, and to hit $1.4 trillion by 2015. The U.S. market alone is estimated to reach $31 billion by 2016.
M-payment, or mobile payment, is a point-of-sale payment made through a wireless handheld device. M-payments worldwide are expected to reach $171.5 billion in 2012, $633 billion by 2014, and grow to $670 billion by 2015. (Data source: Mobithinking.com).
To maximize their M-payment opportunities, Google launched Google Drive to provide users with secure payment processing through cloud computing. Users can also download the Android app Google Wallet and link it to their credit or debit card. Both Citibank and MasterCard see the monetary potential in M-commerce and are helping Google Wallet monetize their M-payments. Between Google’s Gmail and Android users, Google estimates that 1 billion people will use at least one type of Google service by 2013, representing an incredible customer base for Google Wallet marketing.
The profit potential inherent in M-commerce and M-payments means that Apple can’t afford to sit by and let Google and PayPal dominate the field. Apple originally claimed to have no interest in NFC technology even as the company quietly obtained patents to place NFC chips into their next iPhone. In a move that should surprise no one, Apple also applied for a patent for their iWallet. Apple has 200+ million existing iTune users with their credit card numbers on file, which make that customer base particularly ripe for iWallet marketing.
The race for M-commerce is just getting started and Google has already jumped ahead in the lead. With billions in revenue at stake, rivals Apple and Google will continue to line up allies and develop new products and strategies designed to increase their share of the M-commerce market.
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