The minute your flight lands in Munich you flip on your cell phone and are automatically provided with a list of local restaurants that fit your taste and budget, as well as the option of booking directly one of the few seats still available for tonight's performance of Don Giovanni at the Bayerische Staatsoper.

Such is the world of personalized, mobile e-commerce, a market expected to explode over the next few years as advances in phone and network technology combine to allow a brand-new range of services to emerge. "The [phone] operator already knows where you are when you use your phone; why shouldn't the next step be to give you access to the shopping offers that are in your vicinity?" says Lydia Aldejohann, a manager at Giesecke & Dervient, a German manufacturer of smart cards — plastic credit cards with embedded computer chips.

By playing to two of Europe's technological strengths — smart cards and mobile phones — the development of such services could boost electronic commerce, an area in which the Continent badly lags behind the U.S. Consulting firm Datamonitor estimates that 32.3 million smart card-enabled mobile phones will be snapped up by consumers by 2003. And Nigel Deighton, research director for wireless communications technology at Gartner Group, another consultancy, predicts that 30-50% of business-to-consumer e-commerce will be via a mobile device by the year 2004.

It may take until 2004 to sort out confusion over standards and upgrade infrastructure, since mobile e-commerce will require the cooperation of merchants, governments, banks, credit card companies and phone operators, says Duncan Brown, director of research for the consultancy Ovum. But European firms are already rolling out the first of these new services. A growing number of phones can access the Web via Wireless Application Protocol (WAP), a technology that brings the Internet to phone displays and permits consumers to trade stocks, lay wagers, shop and make travel arrangements. "We see phones being used as a virtual wallet," says Christer Erlandson, director of wireless e-commerce for Swedish mobile phone manufacturer Ericsson.

In the future, payment options will abound. For example, most phones contain a subscriber identification module (SIM) card that serves primarily to identify a user to the phone network but also allows limited financial transactions. Some manufacturers plan to upgrade the sim card to become an all-in-one ID and credit card. Another approach is to add a slot to mobile phones for a second smart card designed specifically for mobile e-commerce. These cards could be used to make payments over the Internet or removed from the phone for use in point-of-sale terminals to pay for things like a subway ride.

Mobile phone manufacturers are busily trying out the devices of the future:

• Motorola, in a trial with France Telecom, is testing a dual slot phone, the StarTAC D.
• Nokia, in a trial planned for Finland with Visa International and MeritaNordbanken Group, will test a phone that uses a special plug-in reader for a tiny smart card.
• Ericsson plans to use Blue Tooth, a wireless standard which allows electronic devices to communicate over short distances, so that it is not necessary to add a second smart card reader into the mobile handset.
• Siemens is developing both dual slot phones and a device code-named Einstein which will have a smart card reader and keypad that can be linked to the phone via infrared wireless technology

Siemens also foresees a whole range of new mobile devices that could be used for e-commerce. "Someday the phone will ring and you'll look at your watch to see who it is and what it's about; or you will voice-browse the Web from a wireless handset; or you will pay for items by waving your device over another terminal and leave it to the machines to finalize the sale," says Stefan Prange, a project manager in Siemens' Emerging Business Opportunities for Devices division.

If such predictions are right, the new mobile devices will keep European phones and cash registers ringing for years to come.

Reported by JEANETTE BORZO/Paris and PEGGY SALZ-TRAUTMAN/Cologne