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432 Part Three Key System Applications for the Digital Age

watching a video on their phone, or reading a novel on their Kindle. In five
years, the majority of Internet users in the United States will rely on mobile
devices as their primary device for accessing the Internet. M-commerce has
taken off.
In 2012, m-commerce represented about 10 percent of all e-commerce, with
about $30 billion in annual revenues generated by retail goods and services,
apps, advertising, music, videos, ring tones, applications, movies, television,
and location-based services like local restaurant locators and traffic updates.
However, m-commerce is the fastest growing form of e-commerce, with some
areas expanding at a rate of 50 percent or more per year, and is estimated to
grow to $150 billion in 2016 (see Figure 10.9). In 2012, there were an estimated
4 billion cell phone users worldwide, with over 855 million in China and 242
million in the United States (eMarketer, 2012 (M-commerce sales); eMarketer,
2012 (mobile phone users)).
The main areas of growth in mobile e-commerce are retail sales at the top
Mobile 400 companies, including Amazon and eBay (about $18.8 billion); sales
of Apple and Android apps (about $8.7 billion); and sales of digital content
music, TV shows and movies (about $3 billion) (Internet Retailer, 2012). These
estimates do not include mobile advertising or location-based services.
M-commerce applications have taken off for services that are time-critical,
that appeal to people on the move, or that accomplish a task more efficiently
than other methods. The following sections describe some examples.

LOCATION-BASED SERVICES AND APPLICATIONS

Location-based services include geosocial services, geoadvertising, and geo-
information services. Seventy-four percent of smartphone owners use loca-
tion-based services. What ties these activities together and is the foundation
for mobile commerce is global positioning system (GPS) enabled map services

FIGURE 10.9 CONSOLIDATED MOBILE COMMERCE REVENUES

Mobile e-commerce is the fastest growing type of B2C e-commerce although it represents only a small
part of all e-commerce in 2012.

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