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Survey: Cell phone shoppers are hanging up

Consumer interest in buying things online using mobile phones has dropped dramatically, adding to the mounting skepticism about the prospects for new wireless services.

Consumer interest in buying things online using mobile phones has dropped dramatically from last summer, according to a survey to be released Wednesday that adds to the mounting skepticism about the prospects for new wireless services.

Only 12 percent of mobile users surveyed worldwide in January said they intended to use Internet-enabled phones for any type of transaction, down from 32 percent last June.

The decline was most marked in the U.S., where a mere 3 percent of those surveyed planned to buy things using their cell phones, compared to 34 percent six months earlier. In Europe, 14 percent were interested in such mobile commerce, or m-commerce, down from 29 percent last June.

"The scale of the drop was quite a surprise," said Paul Collins, a consultant at A.T. Kearney in London. This latest survey of about 1,600 wireless customers in the U.S., Europe, and Asia is scheduled to be released Wednesday by A.T. Kearney and the Judge Institute of Management, Cambridge University's business school.

Mr. Collins blames the falloff on the failings of the first wireless Internet offerings that hit the market last year and says sales of cellular handsets could suffer as skeptical consumers seek other ways to go online.

Mobile operators around the world have invested massively in licenses and infrastructure that will allow them to offer faster wireless Internet access. But research to date has raised questions about how soon and how much consumers will be willing to pay for the more sophisticated services.

European consumers surveyed by Jupiter Research earlier this year showed little interest in any mobile application beside electronic mail. Similarly, cellular users polled by Forrester Research in Germany at the end of 2000 were on average "not interested" in a menu of possible mobile Internet applications.

Perhaps worse news for the cellular carriers, those consumers and European businesses surveyed by Gartner Group this winter showed an aversion to paying much--if anything--for wireless Internet services. And some retailers, like online bookseller Amazon.com, have scaled back or eliminated m-commerce initiatives because of lackluster customer interest.

Mobile operators and handset makers generally concede that the first generation of those services using Wireless Application Protocol, also known as WAP, or its equivalents have disappointed consumers with slow speeds and limited offerings. But they say network upgrades this year and next will make them more attractive and win over customers en masse.

At the same time, an explosion in the use of wireless instant messaging world-wide could help make those cellular users more receptive to m-commerce services down the road. 75 percent of European and 57 percent of Japanese mobile users send text messages over the cell phones, according to the A.T. Kearney/Judge Institute survey. Meanwhile, 27 percent of U.S. users do the same.

And some carriers say it's wrong to totally write off m-commerce for the moment.

"I could not imagine that we've seen the growth of WAP we've seen without the sustaining of m-commerce on our portal and network," said Peter Lisle, a program manager for GPRS wireless Internet services at Cellnet, British Telecommunications PLC's UK mobile operator.

Mr. Lisle said m-commerce statistics were not immediately available for Cellnet, but that the carrier has registered as many as 80 million page impressions -- which counts the number of single pages accessed -- per month on its WAP portal site.

While the majority of new handsets come with WAP or similar wireless Internet capability, only 16 percent of cellular users world-wide owned one of those more advanced phones as of January, according to the A.T. Kearney/ Judge Institute survey.

Like other industry analysts, A.T. Kearney's Mr. Collins says mobile operators need to replace their obsession with network technology with a focus on constructing offerings that will interest consumers. A lack of interest in wireless Internet applications and concerns about ease of use were the two issues cited most frequently by survey respondents.