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IBM, Nokia team on wireless payments

The companies will participate in a pilot program that will let people in Finland buy items on the Web using cell phones.

Nokia and IBM will participate in a pilot program that will let people in Finland buy items on the Web using cell phones, according to the companies.

IBM is supplying the payment infrastructure for the project, which will let some handset owners load their credit card information into a phone and transfer it to a merchant using the wireless Internet. Nokia will supply the phones.

The pilot will only be available to wireless subscribers in Finland and should begin by year's end. There are two other smaller companies involved in the pilot: Radiolinja, a Finnish wireless carrier, and Luottonkunta, a Finnish credit card company

Keith Nowak, a Nokia spokesman, said it's the first time that Nokia, which sells the most handsets in the world, and IBM, which has been pushing into wireless computing for several years, have joined forces.

Monday's announcement involves what is known as "mobile commerce," or the use of a phone to access the Internet and buy goods or services. Like most things wireless, mobile commerce has generated a good deal of hype. But handset owners haven't taken to mobile commerce in any real fashion yet.

In fact, some analysts have begun revising downward their projections for how much people plan to spend on mobile commerce.

Keith Waryas, mobile commerce analyst for IDC, said the market research firm is revising its mobile commerce projections. IDC estimated that by the end of this year, there would be about $419 million trading hands through mobile commerce worldwide. By comparison, the total amount of commerce on the Internet this year was expected to be $273 billion. By 2005, mobile commerce was expected to hit about $39 billion, compared with $1.8 trillion in commerce done on the wired Internet.

The revisions are still taking place because the projections were made based on a "blue-sky market" that has turned gray, Waryas said.

Survey firm A.T. Kearny said the number of people in the United States who intended to make purchases using the mobile Web decreased from 34 percent to 3 percent between June 2000 and Jan.1, 2001.

Nokia on Monday also announced a second mobile commerce project, this one involving longtime collaborator Visa International. The two companies have begun a pilot program that will let some people buy groceries online from Finland-based Internet grocery store Ruoka.net, or get tickets for movies at Finnish movie theater Kinoplaatsi.