Beyond Ringtones and Games

Feeling guilty about leaving his wife behind during an extended business trip, Richard Davis sprang for a last-minute gift. Sitting on the runway at Boston's Logan Airport, he pulled out his BlackBerry, launched Digby -- a free shopping application he had downloaded to his device -- and purchased a bouquet of flowers, along with a miniature teddy bear, from retailer FTD.com with just a few clicks.

"My wife was really pleased," says Mr. Davis, 46 years old, who works for investment bank Needham & Co. LLC and lives in Wellesley, Mass. "It's pretty nice to be able to shop online from a hand-held."

Retailers and wireless companies have been buzzing about enabling consumers to purchase everything from flowers to flat-screen television sets from their mobile phones for years. But mobile versions of popular online Web sites like Amazon.com have been slow to catch on because they have been difficult to find and can be painfully slow to load.

Now new services, many of which are being offered for the first time through wireless carriers, are trying to make mobile commerce more mainstream. While many still require multiple steps and an agility with small screens, they are making mobile shopping easier through better interfaces, wider selections and more secure payment options.

Ultimately, the services hope to transform the mobile commerce industry -- currently dominated by purchases of digital content such as ringtones and games -- into a mirror of the online shopping world where virtually any item can be retrieved with just a few clicks.

Sprint Nextel Corp. today plans to announce its launch of Mobile Shopper, a mobile shopping service that is free minus charges for data usage. The service allows users to search for and buy items from some 30 stores, including Target and eBags, by clicking on a Web icon on the main menu of their data-enabled phones.

Users can search among seven million items by entering the brand and style number or clicking through product-category menus. To make a purchase, users set up a mobile account with their shipping and credit-card information and enter their phone number and PIN.

Retailers, for their part, are continuing to invest in improving their own mobile Web sites, often through partnerships with established online-payment companies. More than 35 retailers selling everything from DVDs to golf clubs, for example, are accepting PayPal Mobile Checkout, which eBay Inc. launched in July.

The service allows consumers to purchase items from partner retailers from their PayPal accounts, which users can access with their standard PayPal user name and password or by their mobile number and PIN. Google Inc., which offers a mobile version of its Google Checkout online-payment service, recently entered the fray further by filing for a patent for its own mobile-payment system.

Other companies are launching software applications. Digby, operated by 30 Second Software Inc., stores retailers' best-selling items within an application users download on their BlackBerry, refreshing the selection every night. Storing items this way can dramatically cut back the time it takes to find popular items like chocolates and books by reducing the number of times the service has to connect to the mobile Web. The company also provides access to more than one million products over the mobile Web.

Digby, which takes a commission on all items sold through the service, eases the checkout process by allowing users to store their credit-card information on their phones.

Barriers such as handset limitations and consumers' relatively low rates of adoption of mobile Internet services have prevented wireless carriers, who have extraordinary control over the types of services consumers can easily access on their phones, from investing heavily in the market.

Carriers have generally preferred to be involved in billing customers for mobile media content like ringtones, for example, because it allows them to take a healthy cut of the transactions. But they will have to accept processing payments through credit cards and PayPal accounts if they want to make the mobile-shopping experience as much like shopping on a PC as possible. Sprint declined to comment on whether it will get any direct revenue from sales, saying it hopes to capitalize on interest in mobile shopping by signing up more subscribers for data plans.

But new payment services and the growing adoption of other mobile Internet services such as music and video are causing carriers to take the market more seriously. Thom Russell, director of business development for consumer products at Verizon Wireless, says the carrier sees potential in a variety of approaches to mobile commerce, from mobile-phone coupons and promotions to handsets that double as credit cards. Such experimentation is more possible now than a few years ago, he said, because "our customers are getting much more technically savvy about the things that can happen on a phone," he says.

AT&T Inc., meanwhile, conducted a trial earlier this year in which users were able to wave their phones over MasterCard PayPass systems in restaurants and other locations to make purchases that were charged to their credit cards. A spokesman for AT&T said the trial went well but the company hasn't announced plans to roll out the technology nationwide.

By 2011, the total transaction value of mobile payments is forecast to reach $22 billion world-wide, according to Juniper Research, up from just $2 billion at the end of 2007. While the bulk of the transactions still happen in markets like Asia, where cellphones are more advanced, demand in North America is forecast to increase as handsets, connection speeds and services improve.

"Mobile phones are a great on-ramp to buying all kinds of goods and services on the Internet," says Anil Malhotra, senior vice president of alliances and marketing for Bango, a United Kingdom-based firm that processes mobile transactions for carriers and helps companies develop mobile Web sites. Initially, products like flowers and small gifts might be the most popular mobile commerce purchases, Mr. Malhotra says. But over time, he expects the lines between shopping online via a PC and a cellphone will blur.

Many consumers, though, remain unconvinced. While trying to purchase a DVD from a mobile version of Amazon recently, 27-year-old Serene Hammond of Washington, D.C., was hit with multiple error messages and quickly gave up. "It is a useless technology," says Ms. Hammond, who works for a pharmaceutical company and says she doesn't see the urgency of shopping from a phone when she is regularly around a computer. An Amazon spokesman said he looked into the complaint and that "everything is working just fine."

Still, companies believe that demand for on-the-fly purchases will grow as the process becomes easier and are trying to make it so. 2B Wireless Inc.'s mShopper, which powers the new service from Sprint, reformats product listings so they render well on the mobile screen, reducing photo sizes and reducing extraneous text. The company also offers access to live customer-service agents.

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