June 24, 2010, 1:06 PM

The new iPhone changes mobile commerce

The new features of the iPhone will make mobile retail sites more compelling, say experts.

Lead Photo

Apple Inc. has done it again: The new iPhone 4 hits store shelves today and it already is selling at a record pace. 600,000 orders on June 15, the first day for pre-orders, wreaked havoc with the ordering systems. And in total Apple says it has received 10 times as many pre-orders for the iPhone 4 than for its predecessor, the iPhone 3GS. And some mobile analysts are predicting Apple will sell 1 million of the new devices worldwide today alone.

Retailers in mobile commerce or considering selling to consumers via their mobile phones need to pay heed to two key points surrounding the iPhone 4: its popularity and some of its many new features.

The iPhone 4 clearly already is on a path to success, chewing up more of the smartphone market. Importantly, it uses the same operating system, the new iOS4, as the iPad—and Apple has sold 3 million iPads, its new tablet computer, in only three months. Combine iPhone 4 and iPad users with the millions of users of the iPod Touch and earlier models of the iPhone, all of whom can upgrade for free to iOS4, and you have a huge operating system presence in the world of smartphones.

“The iOS4 platform overall is the largest addressable mobile platform and it’s growing at a very rapid click,” says Avi Greengart, research director, consumer devices, at Current Analysis Inc., a mobile hardware and telecommunications research and consulting firm. “If you’re trying to sell something to the mobile audience, the devices running iOS4 are the most lucrative devices to address, and the first you should be looking at.”

But sales of smartphones with Google Inc.’s Android operating system are on the rise, and there are many BlackBerrys in consumers’ hands; so once a retailer gets an iPhone presence, it should also consider other mobile platforms to gain access to more mobile users, Greengart adds.

The iPhone 4—the 16-gigabyte version costs $199 and the 32-gigabyte version $299—comes packed with new features. These include: longer battery life; the iPad’s custom chip, which greatly increases speed; a screen resolution of 326 dots per inch, four times as many pixels as the previous 3GS model; and the ability to multi-task, having multiple apps open at the same time.

“Extended battery life will help m-commerce for the simple reason that if consumers know the phone can last all day, they are more likely to use it more heavily, which means more web browsing,” Greengart says. “And the astonishing screen resolution makes any text look like it’s printed on the screen. But more important, retailers need to better optimize their images for the new device, because the better something looks, the more likely consumers are to buy.”

The sale of physical merchandise via mobile phones hit $1.2 billion in 2009, according to emerging technologies consulting firm ABI Research Inc., and is projected to reach $2.2 billion this year.


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