Commentary

eBay Ties Its Mobile Growth To iPhone

ebay/iphone

During eBay's third-quarter conference call last week, CEO John J. Donahue highlighted mobile commerce as an area where the e-tailing giant is innovating to help boost sales. He pointed out that the eBay iPhone app has been downloaded more than 4 million times, is expected to generate more than half a billion in gross merchandise value this year.

Donahue also said it was easier to use PayPal for purchases on the iPhone than ever before and that the company is "rapidly iterating in mobile and will soon be introducing the next version of our eBay iPhone app with improved functionality and features." Given Donahue's focus on the popular Apple device, he might as well have referred to what the company is doing in "iPhone" rather than mobile commerce.

More to the point, Donohue's comments suggest that while iPhone users likely only account for only a fraction of eBay's 85 million active users are driving m-commerce on the site. And the key to that business is the company's iPhone app rather than the mobile Internet. For an e-commerce business that reaches the masses, you'd assume eBay would make the mobile Web the focus of its strategy for expanding to cell phones.

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The familiarity and user-friendliness of the iPhone-iTunes-App Store ecosystem still trumps the slowness and hassles associated with the mobile Web as an m-commerce platform. Debate has emerged over the last year as to whether every company needs an iPhone app, or whether they should turn to the iPhone at the expense of developing a strong mobile Web presence.

Certainly, eBay has the advantage over smaller companies of being well known, so people will simply go to the App Store assuming it has an app. But if an e-commerce powerhouse like eBay is for now focusing mobile efforts on the iPhone, then why wouldn't other online retailers who have even less chance of persuading customers to do business via the mobile Internet?

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