Mobile commerce was born in 1997 when the first two mobile phone enabled Coca Cola vending machines were installed in the Helsinki area in Finland. They used SMS text messages to send the payment to the vending machines. In 1997 also the first mobile phone based banking service was launched by Merita bank of Finland also using SMS.In 1998, the first digital content sales were made possible as downloads to mobile phones when the first commercial downloadable ringing tones were launched in Finland by Radionlinja (now part of Elisa).

In 1999, two major national commercial platforms for m-commerce were launched with the introduction of a national m-payments system by Smart as Smart Money in the Philippines and the launch of the first mobile internet platform by NTT DoCoMo in Japan, called i-Mode. i-Mode was revolutionary also in offering a revenue-sharing deal where NTT DoCoMo only kept 9% of the content payment and returned 91% to the content owner.Mobile commerce related services spread rapidly in early 2000 from Norway launching mobile parking, Austria offering mobile tickets to trains, and Japan offering mobile purchases of airline tickets.The first conference dedicated to mobile commerce was held in London in July 2001 and the first book to cover m-commerce was Tomi Ahonen's M-profits in 2002. The first university short course to discuss m-commerce was held at the University of Oxford in 2003 with Tomi Ahonen and Steve Jones lecturing.PDAs and cellular phones have become so popular that many businesses are beginning to use m-commerce as a more efficient method of reaching and communicating with their customers. Although technological trends and advances are concentrated in Asia and in Europe, Canada and the United States are also beginning to experiment with early-stage m-commerce.The less price sensitive early adopters from the 13-25 age group could drive the initial growth. Growth in mobile products such as ringtones, games, and graphics may displace spending on many traditional youth products such as music, clothing, and movies. This would radically change the dynamics of all visual entertainment and product-service distribution world wide so marketers could target end-users with diverse youth mind sets.

The youth market has historically shown rapid viral growth which later gains acceptance in the mass market. While emerging markets are proving to be the ideal solution for sustaining revenues in the face of falling ARPU average price per unit, analysts say the rapid commercialization of 3G services is likely to open up new opportunities in developed markets.In order to exploit the m-commerce market potential, handset manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint to develop WAP-enabled smart phones and ways to reach them. Using Bluetooth technology, smart phones offer fax, e-mail, and phone capabilities.

"Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Burchett. Perennial early adopters, such as the youth market, which are the least price sensitive, as well as more open to premium mobile content and applications, must also be a key target for device vendors.