In order to enhance mobile commerce capabilities, e-commerce service provider, eBay Inc. ( EBAY ) has been developing new applications for its mobile-commerce platforms and popularizing payment through smartphones.
The company announced a number of strategic moves to boost mobile offerings, including a new partnership with Three.co.uk, UK's fastest growing mobile network, to deliver Android devices preloaded with eBay mobile apps.
Additionally, eBay aligned its PayPal suite with Spain's ticketing company Entradas to allow users to book tickets on a mobile device. PayPal has collaborated with Yotel to allow consumers to book rooms on their smartphones. These moves will give eBay's customers a quick, easy and direct shopping experience.
Very recently, eBay released its new Core mobile app version 2.5.0 update on iPhone, making sales possible from virtually anywhere. The update will also provide improved image quality, push notifications on bids and enable Twitter integration.
Riding on hopes to benefit from these efforts, eBay expects to generate $8 billion in mobile commerce retail volume in 2012. In 2011, eBay mobile commerce generated $5 billion, and PayPal mobile generated $4 billion in payment volume, with its mobile apps having been downloaded more than 70 million times.
Aided by growth in its PayPal business and mobile commerce, EBay recorded a strong quarter with revenue of $3.38 billion and earnings of 33 cents, both above expectations. However, the company provided a conservative quarterly sales forecast of $3.05-$3.15 billion, reflecting a weak European economy. However, we believe that eBay has taken all the necessary measures for continued growth in mobile commerce in the near future. Both Payments and Marketplaces are showing improving trends versus the year-ago quarter, indicating its changing business profile.
Though eBay's payment business shows great promise, here too competition may be expected to pick up as banks and other companies announce their own payment systems and Google Inc's ( GOOG ) digital wallet gathers steam.
Currently, eBay shares carry a Zacks #3 Rank, indicating a short-term Hold recommendation.