January 2, 2006
2006 may finally be the year that consumers buy goods with their cellphones
With people already spending billions on ring tones, wallpaper and games for their phones, analysts and retail executives say they believe it will not be much of a leap to get them to use their phones to buy shoes, books and laptops, writes The New York Times.
EBay plans to introduce to Verizon users this month a new version of mobile phone technology that will allow subscribers to browse the site, bid on items and receive alerts whenever they have been outbid. The service, which is already available to users of Cingular and Sprint, is a premium version of a stripped-down program that is available free on any phone with a Web browser.
Overstock, which sells travel services and products for fixed prices and at auction has recently started Mobile O, where cellphone users can use their phones to browse and buy anything on Overstock's Web site. "We do see the number of orders on Mobile O gradually picking up, but it's still a tiny percentage of our business," said Patrick M. Byrne, at Overstock. "My hunch is that this is going to start really happening more in '07."
"I view this as a lottery ticket we're paying maybe $300,000 a year to buy," including staff costs, he added. "Maybe that's all lost money, but if American consumers ever adopt this, we're first in the game."
Security has been a concern for both retailers and cellphone companies; neither wants to be held responsible by consumers if their credit card information is pilfered as it is entered into their handsets.
EBay avoids that problem by not giving users the option of paying by phone. They can win auctions or even secure most "Buy It Now" purchases using their cellphones, but they must pay for the purchases through their PC's. Overstock allows users to tap in credit card or login information securely, using data encryption methods.
The biggest beneficiaries of these services could be cellphone companies. Chris Matherly, fromk Verizon Wireless, said the company had "seen this migration coming for quite some time. ""Data products and services are growing, and as that happens these early adopters from three years ago want to do more than just download videos and games," Mr. Matherly said.
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