Mobile Commerce to Hit $1.6 Billion in 2009…And It Won’t Happen In Stores

ABI Research says the mobile commerce market will hit $1.6 billion in 2009...but it won't be from people using cell phones as replacements for credit cards.

A new report from market analysis firm ABI Research forecasts that mobile commerce will account for $1.6 billion in revenues in 2009 as the proliferation of smartphones and consumers’ increasing comfort with mobile transactions translates into phone users making purchased via their handsets. But the so-called “holy grail” of mobile commerce—customers using their mobile phones to make on-site purchases without bugging staff or using a register—is still a pie-in-the-sky dream. Instead, consumers will be using their phones like mobile Web browsers, making purchases via the likes of Amazon, eBay, and iTunes using mobile data services and Internet connectivity.

“Mobile Internet shopping is the largest piece of the action,” said ABI Research senior analyst Mark Beccue, in a statement. “Thanks to red-hot smartphone adoption, an increasing number of subscribers are shopping at mobile commerce sites such as Amazon and eBay.”

For years, phone manufacturers like Nokia have been promoting the use of mobile phones as “digital wallets” that enable people to make real-world purchased using their phones: a classic example is a vending machine, where a user could purchase a snack or, say, a USB flash drive, using their phone and simply have the charge appear on their phone bill. But these so-called Near Field Communications (NFC) transactions have failed to take off and will be a negligible part of the overall mobile commerce picture in 2009—despite seemingly compelling uses such as person-to-person payments, mobile banking, and mobile financial services such as international funds transfer. Instead, mobile commerce is currently dominated by mobile Internet use, SMS-related purchases, and mobile applications.

ABI Research highlights NFC transactions as being hampered by “unclear business models.”