Mobile Wallet A Decade Away - Wired (blog bummer + Marty Note) | Mobile Technology |

"Even if your current smartphone is technologically capable of handling payments, passes and membership cards, and IDs, the real infrastructure will take up to a decade to get fully sorted out. For payments, especially, smartphones are taking on a lot of the functions of our wallets without fully replacing any of them..."


Therese's comment: Cites analyses from Gartner group and Forrester Research


Marty Note

This was a bummer of a read, but I think it feels accurate. We remain behind Europe because our Telecos are making way too much money from the absurd and soon to be gone (charging for minutes and data). I think AT&T et al. are tripping over the million dollar bills to pick up the pennies, but the attraction of high margin today vs. the possibility of world domination later is too attractive.


The real money in cellular isn't in the phone. The real money is in the network. As Sun Microsystems (remember them) CEO Scott Neely famously said, "The network IS the computer." The phone is equivalent to those old TTY devices we used to used to connect to mainframes so Stupid is as Stupid does.


The intelligence isn't in the phone. The intelligence is in the cloud, the network or whatever you want to call it. We know from Metcalf's Law the value of a Teleco network is square its members, so the network is the computer.


That our Telecos have been able to scale AND make healthy money is a statement about the market and so real innovation will probably come from some other place, a place where the pressure to monetize the network will increase since charging for minutes and data was never a viable long-term market option.


There is no TIME inside a network. Minutes are an artifice since the more people on and using a network the greater the depreciation of its existing assets, another way of saying the network's operating costs, the value of its "minutes", goes DOWN by the square for every new member.


Minutes are akin to your razor. Gillette is glad to give away the handle since the value is in selling you the blades and the cost of razor blades continues to escalate well beyond inflation because it can. So to with a Telecommunications network. Your engagement is the most expensive acquisition.


Once you are happily on AT&T or Verizon then you are profitable. Can't make money from people NOT on your network. Actually Telecos can since much of the infrastructure is theirs too and all that packet switching isn't free. Why haven't we had an all out price war in cellular?


This article explains why. Since the innovations that make the network pay off are far off money today creates a war chest for world domination tomorrow. One thing being an Internet marketer and reading Taleb's Black Swan have taught me is the best laid plans rarely happen as planned. Here is hoping some upstart is reading this thinking, "Yes the network is the computer".


Good scoop from Therese even if it is a bit of a bummer :). M