Advances in e-commerce have resulted in significant progress towards strategies, requirements, and development of e-commerce applications. However, nearly all e-commerce applications envisioned and developed so far assume fixed or stationary users with wired infrastructure. We envision many new e-commerce applications that will be possible and significantly benefit from emerging wireless and mobile networks Context-aware computing is a mobile computing paradigm in which applications can discover and take advantage of contextual information. Before mobile devices, computer applications only had to consider a fairly limited set of contextual concerns where users performed tasks on computers that remained stationary. With the advent of mobile and wireless devices, context is a less predictable influence on the actual design and use of computer systems. People are using applications in environments that are relatively unstable from one moment to the next. This paper attempts to present basic concepts like definition, characteristics, and types of context and features that are characteristic for context-aware applications. Structuring context aware applications is important for modularizing their implementation. The modularization is necessary for re-use and sharing of software and hardware components. A five-layer model for structuring context aware applications is presented later. It also discusses on location based service requirements and concludes with illustrations.