May 10, 2001 – Consumers worldwide appear to be hanging up on the idea of m-commerce.

According to the latest Mobinet Index report, conducted by A.T. Kearney with Cambridge University's Judge Institute, consumers are "significantly less likely" to make purchases from their mobile devices this year than they were last year.

The report released today and representing findings from eight countries found that only 12 percent of the mobile phone users – compared to 32 percent this time last year – said they intended to use their Internet-enabled devices to make purchases.

The drop in consumer acceptance was most dramatic in the United States, where the figure fell from 34 percent last year to 3 percent this year.

Even more striking, fewer than one percent of the respondents actually made mobile purchases – and those consumers were located in only three countries: Japan, Finland and the United Kingdom.

The survey was conducted in Finland, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

"To date, the promise of mobile commerce has not been embedded in the buying habits of consumers. In this regard the lure of the digital economy has yet to take hold," said Charles Coates, a London-based A.T. Kearney vice president in the firm's Consumer Industries and Retail Products practice.

Evolutionary Cycle

However, consumers are embracing other mobile-based data services and applications, notably messaging. The one exception: adoption in all areas is slowest in the U.S.

According to the findings:

• Seventy-five percent of European respondents and 57 percent of Japanese respondents use instant messaging through their mobile phones, compared to 27 percent in the U.S.

• Nearly three in four Japanese participants access e-mail via their mobile phones, far greater than the approximately one-in-four Americans and Europeans doing so.

"Mobile phone use appears to be going through an evolutionary cycle," said Cambridge Business School Professor Chong Choi. "First for voice communications, then as a text-based communications tool (e-mail, short messaging services) and finally as an Internet-enabled purchasing tool."

Future Task

According the authors of the study, the mobile industry needs to "act quickly" to reverse the trend by finding "more effective ways to promote the whole concept of m-commerce."

Notable in the findings, say the authors, is "lower than expected" ownership of Internet-enabled devices, logged by the study at an average of 16 percent for all countries surveyed.

Among the reasons for the slow adoption rate: concerns about comfort and ease of use (19 percent), data security (16 percent) and lack of time (16 percent).

In short, consumers have not been convinced that mobile devices offer any advantages over traditional platforms, the authors say.

"The mobile industry's three main segments – service providers, hardware providers and content providers, as well as the retail industry – must explore ways to act together to demonstrate the benefits of mobile commerce to consumers," said L.C. (Mitch) Mitchell, Dallas-based A.T. Kearney vice president and Communications Industry Practice leader.

"If the parties don't work together to bring the digital customer experience to life, there is substantial risk that consumers will be slow to embrace m-commerce."

A.T. Kearney is a management consulting subsidiary of global information technology services firm EDS. The Judge Institute of Management is Cambridge University's business school.

A copy of the study is available at www.atkearney.com