• by Masha Geller , July 9, 2001

A reality check from a research house? Well, sort of. This morning, Jupiter Media Metrix said that mobile transactions will comprise only a sliver of all online shopping even though nearly 40% of the U.S. population will subscribe to a wireless web service.

Considering that mobile transactions are so closely related to mobile ads, this is worth talking about. According to Jupiter's latest release, although the U.S. has the largest base of cell-phone users in the world, less than $4 billion in shopping and travel will be transacted on web-enabled phones in 2006 - that's less than 2% of all online shopping.

The report says that consumer interest in purchasing items using a wireless device is not a priority, as only 7% of consumers express a desire to transact with a mobile phone. Jupiter analysts predict, however, that shopping-related content on mobile devices will influence transactions online via PCs and offline in brick and mortar stores - sales that will be valued at 39 billion dollars in 2006.

"Limitations of wireless devices and slow networks are being used as unacceptable excuses for the slow growth in US mobile commerce. The actual culprit is consumer apathy," said Dylan Brooks, Jupiter wireless analyst. "With the number of U.S. consumers conducting wireless transactions not expected to exceed one million until late 2002, carriers and merchants must change strategies to focus on simple text messaging and text-enhanced voice services until Americans are more comfortable with using the wireless Internet. Influencing mobile users with timely and location-based research or promotions sent to wireless devices will be key to successful mobile commerce."

According to Jupiter analysts, mobile commerce will be driven by a desire for instant gratification, not extensive research, which fueled the early adoption of online commerce. Therefore, mobile commerce revenues will be characterized by time-critical purchasing. Top wireless commerce categories will be those that benefit from personalization, time and location sensitivity. Jupiter projects that U.S. mobile merchant revenues will total only $22 million in 2001 and will be driven largely by occasional sales of entertainment and airline tickets, flowers and other timely gift items.