Mobile Disruption Case Study: Camera Industry. Lessons for all inside mobile disruption from advertising to banking to AR Augmented Realitydown

We just have news from Nikon the Japanese camera giant, sadly, shutting down a giant factory of 2,500 employees in China. That reminded me, that I could do an update to the first-ever case study of what happens to an industry when it is hit by the mobile revolution. It is a severe case of the 'digital' revolution which powers the internet and before it, the PC-related disruption. Mobile also combines obviously the effects of the parallel 'social media' revolution which only gained true power after social media discovered mobile (as chronicled on this 'Communities Dominate' blogsite).

But the camera industry is the first case study of an 'outside' industry being hit by the mobile revolution. We see today dozens of such industries facing similar issues as the camera industry did, from the oldest industries literally like money and payments, to pervasive industries such as media advertising and marketing, to human needs industries from healthcare to education, to various high tech areas including VR and AR (Virtual Reality and Augmented Reality). The relevant point is, that the camera industry faced mobile disruption among the very first (together with the music industry and the messaging industry) and the camera industry has gone 'furthest' into its demise, due to the disruption of mobile. This is why the camera industry is the 'best' case study for ANY other industry to monitor and study, to find possible effects to THEIR industry, and better prepare and deal with mobile disruption than the camera industry was able to. That is why I regularly do the Camera Industry case study in my various workshops around the world, and it is often requested by conference producers for me to include, in my public speaking. It is the proverbial 'canary in the coal mine'. What happens to Nikon now, could happen to Microsoft soon and someone like Citibank in a decade from now...

So lets do an update to one of my most popular items. The Golden Age of Photography....

GOLDEN AGE OF PHOTOGRAPHY

If we take the period from 2005 to 2015 as a ten-year period 'decade' then that is literally the golden age of photography, when the total planetary population of cameras grew 10-fold, and today six out of ten humans alive have access to a personally-owned camera - and take pictures (and often videos) with it. We all know those are not stand-alone Nikon or Canon or Olympus cameras, they are of course Samsung Galaxies, Apple iPhones, Huawei Honor smartphones, and even basic Nokia featurephones that can be 5 years old, but still usable and that have a camera. They are mobile phones, ie cameraphones. Nearly everybody who owns a stand-alone camera like a Nikon or Canon, will ALSO have a smartphone with a camera. And most who own a stand-alone camera, also use the camera now on their smartphone (at least for some random snaps) and for some who own premium stand-alone cameras, they have ABANDONED the use of the expensive camera setup and ONLY use the smartphone camera/s. For over 90% of all people who own a camera today, the ONLY camera/s they own are on mobile phones. Less than 10% of 'camera owners' today have any type of stand-alone camera like an Olympus, Canon, Panasonic or Nikon. And of those 10% less than half use their stand-alone camera as their primary camera anymore.

In the Golden Age of Photography, the planet's camera user population not only exploded, it became only the second technical gadget used by more than half of all humans alive (the first being the 'mobile phone' which includes also those phones from years ago, that didn't have cameras on them). And while 'voice calls' used to be the primary reason for getting a 'mobile PHONE' today voice calls are not even the most popular uses of a modern mobile, messaging is the most used function and the camera has now also passed voice calls, and the camera is used by more mobile owners than placing voice telephone calls, on a 'mobile phone'. Funny, isn't it?

When cameras came onto mobile phones - as mobile phones are always carried (we even sleep with them, as I've been teaching for more than a decade, the mobile phone is the first thing we see in the morning and the last thing we see when we go to sleep) - that revolutionized the USES of the camera. First off, the number of photographs taken exploded - because the camera was always with us. The original uses for most cameraphone users were similar photography situations as with traditional cameras - family meetings, birthdays, beautiful landmark photographs on vacations etc. Then came the selfie. Suddenly a new TYPE of photography emerged, partly because it is far easier to take a selfie with the camera FACING the screen, than on most digital stand-alone cameras, whose viewing screen faces away from the camera. Of course not all early cameraphones HAD a second selfie camera. It was one of the obvious shortcomings of the early iPhones for example. But recent studies have shown that many teen and young adult consumer cameraphone users take one selfie EVERY DAY. The emergence of the selfie stick speaks volumes of how global and massive this new photography sector had become. Nikon, Canon, Minolta, Konica, Olympus etc could not capitalize on the selfie phenomenon.

As Selfies are rather 'obvious' visually clear uses of cameraphones - you can spot a selfie shooter from literally a mile away, because of how he or she holds the camera, vs people who take a 'tradtional' picture using the same kind of cameraphone. You know, with the hand held out, and aiming the phone at yourself, with your back facing the particular landmark etc. The 'selfie pose' type of photography session. But selfies are only the START of the vast range of new types of photographs that people use their cameraphones for, that traditional stand-alone cameras were (usually) not used for. So lets take 'scanning'. The popular phenomenon of taking scans of receipts or documents or invoices or travel itineraries etc, and storing those 'scanned' images on the phone. We could of course use a 'flatbed scanner' to scan such documents but most consumers do not have flatbed scanners at home (or even at the office) and that is tedious later use of the tech, while the cameraphone is instantly available, in your pocket. Lets do that now.

A related use is to scan photographs. If your relative has old paper photographs, for which the negatives are long-lost, but they are pictures of you as a child, what do you do? You don't take the pictures to a photography services company to process into digital images. No. You take out your smartphone and place the paper pictures onto the kitchen table at your relative, and you make sure the light is good, and you snap copies of those photographs onto your own phone. Instant photo-replication. Instant digitalization of old photos. Then the old paper pictures can be thrown away! You already HAVE the digital image that you wanted to keep. Why bother with the old paper... Yes, this was technically possible with stand-alone cameras too, but VERY few truly mad photo nutters would have their digital cameras WITH THEM when that random relative found the old picture of you as a 2 year old with the great-grandma... But everybody has their smartphone in their pocket now.

This leads us to MEMORY ENHANCEMENT. Then come all the issues of taking pictures to help your memory. Not intended ever to be permanently stored and shown to relatives, but simply as a memory technique. Where did I park the car? What is the temporary arrangement of the bus parking when the bus station is under reconstruction? What do I need to buy from the store? A million uses of the camera because it is in our pocket always, to just help remember things. This is camera use that Nikon could never even become part of, but literally BILLIONS of people are doing daily.

Then it gets to the near future. Facial recognition like with the new iPhones. Augmented Reality AR like Pokemon Go. Various radical new uses of the camera function, that were not in any way viable 'photography mass market opportunities' for the traditional camera manufacturers like Canon, Nikon or Olympus.

That is what happened during the Golden Age of Photography and how massively the planetary photography hobby expanded not just in owners of cameras, but in photographs taken per camera, and then leading into whole new USES of the camera in ways traditional camera makers could not hope to even participate in.

WINNERS AND LOSERS

So then winners and losers. The camera industry giants (Nikon, Minolta, Canon and Konica the four biggest) in year 2001 were based in Japan. In year 2001 Nokia and Samsung didn't make ANY cameraphones. Apple didn't even make mobile PHONES in year 2001 (the first iPhone would not be released until six years later). Year 2001 saw the first introduction of the cameraphone, in Japan, by electronics giant Sharp, who already made mobile phones. The cameraphone was such a weird curiosity, that the two biggest Japanese mobile operators/carriers NTT DoCoMo and KDDI both said no to the idea, and only the smallest carrier, J-Phone (now Softbank) dared to explore this idea. With one model. That was ONLY 16 YEARS AGO. The world's first cameraphone. Only 16 years ago.

Then the revolution started rolling. Soon Nokia, then world's largest mobile phone maker, introduced cameraphones; and within a few years was doing N-Series super cameraphones. In under five years, Nokia had become the world's largest camera manufacturer. Under ten years from launching its first cameraphone, Nokia was selling more cameraphones than all stand-alone camera makers (Japan plus rest-of-world) combined. Samsung was already heavily into cameraphones well before Apple got into the act and today of the three most popular camera brands in use worldwide, Samsung is number 1, Nokia number 2 and Apple's iPhone is number 3. Nikon, the world's largest stand-alone camera maker doesn't fit INTO THE TOP 10 !!!

So while Nokia, Samsung and Apple disrupted the camera market and utterly up-ended it, what happened to the camera giants? This was the GOLDEN AGE of photography, when global camera user base EXPLODED to ten times its previous size. What happened to 'the giants'? Minolta? Quit the camera business. Konica? Quit the camera business. Kodak? Went bankrupt. Polaroid? Went bankrupt... twice. Correct that: now three times. The remaining giants saw their stand-alone camera markets shrink at catastrophic rates. Nikon just reported its results for last year. They saw a 24% drop in their total camera business. Nikon gave an even more dire projection of their next year to come. They expect 28% drop in their camera business now for the next year! And Nikon is the LARGEST of the remaining former giants, who control a massive 30% out of this collapsing stand-alone camera market. (Third percent of nothing is still nothing.)

LESSONS TO THE OTHER INDUSTRIES

So what do we learn from this? Some stand-alone camera makers of year 2001 like Sony WERE in the mobile phone handset business, and were able to participate in the market. Sony's smartphones were briefly even ranked third-largest global smartphone maker a few years ago. Sony has had its troubles, but at least they remained in the game, because they saw the future and participated in it. Minolta. Konica. Polaroid. Kodak. Their mighty camera-related businesses collapsed. Nikon and Canon were able to 'retreat' to the 'professional' segment that only prolonged the pain. Their downfall was only delayed. Now Nikon is firing 2,500 staff at their giant China factory because there is no way forward if last year your market fell 24% and this next year it falls another 28%.

Total newcomers who had NEVER MANUFACTURED A CAMERA, like Nokia or Huawei can come in and take most of the growth. Companies who had SOME camera background but did mobile phones like Samsung and Apple, could build a HUGE market capitalizing on this disruption. What is Apple's iPhone market today, could just as easily have been Canon or Nikon or Olympus, if they had had as forward-thinking an executive in charge as Steve Jobs was when he saw the Sony Walkman musicphones gobbling up the market for the iPod music players. Steve Jobs thought that if anybody is going to cannibalize his product's market, ie the iPod, then it better be another Apple product hence the iPhone. And while Apple was very reluctant to get 'serious' about cameras on the iPhones, they did include them and therefore Apple was in the game, while most traditional camera makers like Minolta, Nikon, Konica, Olympus etc were out of the cameraphone game. Look who is standing now? Same story goes with Samsung. Where is Philips? Where is Panasonic? Where are the other big home electronics brands? Sony made its play but most other home electronics giants utterly failed the cameraphone opportunity - even when most HAD done some types of cameras, at least via the VCR-era 'camcorder' video camera-videorecorder systems, which were digital by the end of that technology evolution path. Great global electronics giants failed their future, even as they HAD done mobile phones (like Philips and Panasonic) before. Samsung saw the future and took it.

I want to also mention GoPro. It is NOT that 'any digital camera' invention will succeed in this space. MOBILE always wins. We saw this with so much evidence that it is undeniable. iPod the music player lost to Sony Walkman music phones. Tom Tom GPS navigators lost to smartphones with GPS. And  yes, GoPro the brilliant niche camera geeky gear, lost out to .. cameras on smartphones. It is NOT ENOUGH to be digital. You have to be MOBILE. And by 'mobile' I do not mean portable (like GoPro) I mean 'cellular' mobile. Permanently connected omnipresent mobile ie cellular. 2G or 3G or 4G (or 5G) cellular. Look at Apple's iPad vs iPhone. Look at Apple's Apple Watch vs iPhone. Having WiFi or other wireless is IRRELEVANT. You HAVE to have 'mobile' tech which from practical technical definition means 'cellular'. Having WiFi is NOT ENOUGH (proof? Apple iPod Touch !!! vs iPhone. Which one is left standing? One was cheaper and had only WiFi)

Mobile is unstoppable. Now lets take the lessons to current races and some observations. Microsoft? They SAW the smartphone revolution and when Bill Gates was in charge, Microsoft pursued the smartphone market vigorously (while also ruthlessly as Bill Gates would like to do, abusing his monopolistic powers). You might not have noticed, but Microsoft's Windows smartphone OS was briefly the world's second-most-used OS behind Nokia's Symbian (but their share was only 12% so it wasn't exactly a 'dominant' position when Symbian was at 70%). Then came idiot Steve Ballmer and dickishly destroyed the Windows smartphone future by screwing his ecosystem and partners time and again. Windows smartphone OS just died a few weeks ago. Microsoft has been PLAYED OUT OF THE FUTURE OF MOBILE. They HAVE NO FUTURE. They are like Nikon. The only difference is, Bill Gates HAD SEEN the future and tried to pursue it. It was Steve Ballmer who destroyed Microsoft's path to mobile. Good job, moron!

Who won the operating system war? Not Apple. Did you see iPhone's market share? It peaked at 21% for one quarter five years ago, it is now down to around 14% and falling. Once the whole digital IT world was OWNED by Microsoft and Windows (in the PC era). Today, the future - this whole CENTURY - belongs to.. Google's Android. Microsoft's Windows reached at its peak well over 1 Billion users. Facebook reaches over 2 Billion users. But Google's Android? It reaches THREE BILLION human beings by the end of this year, 2017. Google has won the war of the century. And because Microsoft threw in the towel, they will become as relevant to the tech world as well, Olympus is to cameras today. Yes, you can find one in a specialist store, they still do technically exist. But they are irrelevant to the market of photography. Microsoft Windows will shrink to become a niche specialist IT platform used by some large legacy organizations, and Microsoft will live two decades of continuous decline of relevance to eventually disappear, eaten up by some healthy giant, not for their 'reach' but rather, to hire their skilled staff. (And good riddance too, when that happens)

But look at banks! What happens to money? I said from the start, that money will become mobile. Not plastic, not online e-cash. Not bitcoins. Money will be mobile. Mobile phones become our wallets (and our driver's licences and our passports etc). This is NOW accepted as probably true, as Americans (finally) got into mobile payments thanks in great part to Starbucks mobile wallet, and then - after an eternity, finally also Apple's mobile wallet. In China alone, the mobile payments annual turnover is 100 TIMES larger than the mobile wallet turnover in the USA. And China's economy is only slightly larger than the US. Japan's mobile payments are MASSIVELY bigger than the USA. Europe? More than HALF of all Europeans use mobile payments already! So if you thought mobile payments are 'hot' and 'new' you must have been reading the obsolete thoughts of American tech or banking writers. Go visit Turkey or Romania or Kenya or the Philippines or Estonia or Japan or Finland or South Korea or Norway or Somalia or Sweden or ....

In mobile payments, money, banking, we will have the 'Nikons' giant banking conglomerates who fail at capturing the mobile opportunity. We will have the 'Nokias' and Samsungs and Apples and Huaweis who come from the outside and succeed in 'mobile money' and will take a disproportionate share (and end up buying many of the dying dinosaurs). We will also have the hapless 'Microsofts' who TRY to get in, and fail totally. And we will have the struggling 'Sonys' who will have momentary glory but will find the new digital mobile world difficult to survive in. And who wins the race for the mobile wallet? That battle was already decided. It is Google's Android. Of course.

What about the 'Reality' industries? VR and AR? Virtual Reality and Augmented Reality? I was among the first 'Reality' experts to say AR will be big and VR will only be a niche. And I was THE first to be able to explain WHY it was so. Duh. It is because of mobile. VR like Oculus will never be a global platform, and now the various VR experts are increasingly starting to believe. But because AR can be consumed (with the CAMERA function of) smartphones - AR will be FAR FAR bigger - witness Pokemon Go.

So think about newsmedia, or advertising, or retail, or travel, or healthcare, or education; etc. Or government. Did you know the first passports are already available on mobile phones - done first in the UAE (which was also the first country to do mobile phone based driver's licences)? Yes. The future is here. And the key to being a viable business in the future, is mobile. And one VERY valuable lesson you can bring to your staff is the case study of the camera industry. How the big giants failed to capitalize on the Golden Age of Photography, and the Japanese giants gave their industry to players from South Korea, Finland, China and the USA. Don't let YOUR industry miss out on the mobile revolution. Learn from the lessons of the first case study of mobile disruption.

Comments

[Winter]

Tomi,

The promise of the future are blockchains, in finance and elsewhere. There is already a blockchain enabled smartphone:
https://www.engadget.com/2017/09/26/blockchain-smartphone-sirin-finney-solarin/

Currently only for bitcoins and secure messaging. But this shows that wherever blockchains will set off, they will be on mobile.

[Tester]

Oh yeah, mobile money. I can only repeat what I said 5-6 years ago about this subject and in the mean time none of my views about it have changed. It's madness - it's an idea that's being pursued because it can be done, not because it makes sense.

Am I really that odd not to entrust any of this to an electronic device and service that both may fail at any time randomly? Or is is just because I was able to look behind the curtain while developing mobile software? At least what I learned while doing that was enough never to trust mobile ever again for anything important.

I guess that fairy tale will be over the moment it gets hacked - and trust me, it will get hacked eventually. I can't wait to see some overly mobile-dependent economy crumble to such a hack - it will be utter chaos for the country it happens in.

Until then I stick to cash and plastic cards.

About cameras - that business is a total outlier here because its well being depended on an actual device - a device, btw, that had quite similar dimensions to a mobile phone - sure, it was a bit bulkier but not that much.
And considering what casual photographers need it should be clear that nobody would carry two such devices if one would suffice.

I can see other businesses being cannibalized but not to the same extent because the overall situation is not comparable.

[Winter]

@Tester
"It's madness - it's an idea that's being pursued because it can be done, not because it makes sense."

Many younger people I know (all of them?) do their banking on their phone. They pay instantly by money transfer P2P and P2B. Also NFC payments are widely tested in the field. Only old farts like me still do their banking behind an PC.

Bitcoin is a different matter. But with your wallet backed up (encrypted) in the clouds, that could be more secure as your credit rating in the US, or your banking app in your PC at home.

[Phil W]

Yes I'm old fashioned as well and don't see the need to change from plastic cards. With NFC in debit cards, can't really see the advantage of using phones. But I guess the younger generations will be the ones that drive this.

[Jim Glue]

Excellent analysis of the destruction of the point and shoot camera market by smartphones with cameras. I'm an avid photographer and was highly engaged. The camera companies where hit by a one/two punch from the transition from film to digital then camera to phone.

I have tens of thousands of dollars in digital cameras, lenses, flashes etc. I almost never use them anymore. If I'm doing a real photo shoot (senior portraits, family portraits) I still use my "full rig". If I were still shooting sports (my kids no longer play), I would use my "full rig".

Everything else, which is no 95% of what I shoot, is shot on my iPhone. Somewhere around the iPhone 4/4s the cameras got good enough in my book. The 7+ rivals my DSLR in some situations. But the convenience and always with me rules the day. Yes, my DSLR with my set of wide aperture prime lenses is a LOT better indoors, low light than any camera phone. But dragging around my "bag o' stuff" is a hassle. Even picturesque vacations are handled by my iPhone rather than packing, carrying and worrying about losing my expensive cameras.

When I upgrade my iPhones...it's to get the better camera.

I also edit on my iPhone/iPad. Taking a photo, editing it, and posting to fb is my normal workflow.

With my DSLR, I shoot all day. Download the photos to my computer...which I also have to carry along for this very purpose. Then cull the photos and process the remaining ones. THEN upload them to fb.

Having a wide color gamut, color calibrated screen....very important to photo enthusiasts.

Next post...why I'm not so sure the camera example applies everywhere else.

[Jim Glue]

Ok...clearly the camera phone has disrupted the stand alone camera for all the reasons Tomi so excellently described.

Does this apply to everything else that mobile touches (banking, VR).

Everything? No. Which things?

AR/VR - probably. In time. For the same reasons as the cameras did. It's just a matter of time for the mobile hardware to be good enough...then the rest of mobile's advantages come into play.

Banking? I don't think so. Mobile will be a "new face" for banking. Mobile will ride atop credit cards. Mobile is already doing to ATM's what ATM's did to tellers. But there is still a bank.

Digital currency is a issue in it's own right and THAT could play a role in diminishing some aspects of banking. Or not, depending on whether countries will follow China's lead. But no matter, it won't be mobile that makes digital currency happen. No more than mobile makes EBay happen, or FB happen.

I think services will all ALSO be served on mobile...and this won't destroy the services, but enhance them. This is FB, Ebay, Banking, etc.

Cameras are independent devices who's functionality was replaced by phones. That may happen to VR/AR. There will definitely be mobile variants of both. But the computational needs right now are challenging even for dedicated PC's so I'm not so sure it's a near term threat for mobile VR.

As for AR, Apple's leap with ARKit and the forthcoming horde of AR apps is going to both establish AR period...but also make the case for why you really want AR/VR glasses.

[Winter]

@Jim Glue
"Mobile will ride atop credit cards."

Not in Europe. We do our banking with bank transfers and debit cards. The Mobile allows P2P money transfer fast and cheap.

[Jim Glue]

Hi Winter,

What you describe doesn't sound different. Mobile is piggybacking on top of existing services. In essence, it's a new delivery mechanism for established services.

When I use my bankcard a lot of places recognize that it's both a debit and credit card and will default to making the transaction a debit transaction and thus bypassing the cc fee. But there is STILL a bank involved.

[Michael]

Another market that's completely destroyed by mobile is GPS-navigators

[Phil W]

One of the disadvantages for payment systems involving phones is the battery. If you go out somewhere and were to rely on paying by phone and then find your battery is flat, what are you going to do? Same issue if you rely on phone based airline boarding passes.

It's one of the reasons I would be reluctant to rely on them. The other advantage with an NFC contact less based payment made by debit card is that most payments of this type have a limit at the moment. If you exceed the limit for a debit card, then you just revert to paying with the same card but using the PIN. (I'm in France)

[Winter]

I seem to be unable to add a link.

There us a lot of innovation on the way.

There is an Android app to send paynent requests to whatsapp friend groups that can be directly paid.

Search Tikkie ABN whatsapp.

[Timo]

@Phil W
Same thing is with _cards_ here in Finland too: over 25€ needs you to insert the card (chip) and use the pin. However the _mobile_ payment systems such as Apple Pay or Nordea Pay do not have the restriction. How could they? You cannot insert your phone into the card terminal!
But you need to give PIN or fingerprint scan _on_the_phone_ when you pay with unrestricted NFC payment, which makes sense in case your phone is stolen.
I paid shopping worth 109.90 euros with my iPhone last week-end. Fingerprint scan on the phone and it was done. Even the shop clerk was surprised as she had never thought you could use NFC to pay for anything above 25€.

[Phil W]

Ok Tomorrow, I hadn't realised you could do that. I can almost certainly do the same with my Nokia 5, I just haven't registered for it. I guess it's an age thing!

[Phil W]

Timo not tomorrow! Bloody predictive text!

[Timo]

@Phil W
Android Pay operates at least with HSBC and some other major banks. Some banks have their own NFC apps (like aforementioned Nordea).

[Winter]

Mobile innovation:

More than a million Tikkie users
https://www.abnamro.com/en/newsroom/press-releases/2017/more-than-a-million-tikkie-users.html

[Tomi T Ahonen]

Hi everybody

Wow, am surprised at how much resistance we have here in the comments to the example I drew of mobile money? If I had just published a stat about mo Money and then drew the conclusion that 'Mobile Always Wins' - then I'd understand this amount of reluctance, but you guys? Haha, am really surprised.

Because I did mention cameras dying to smartphones, AND messaging AND music AND navigation ie GPS, AND the recent innovations you knew of, of driver's licences AND passports. That is hardware AND software, products AND services. All headed to mobile 'exactly like cameras' with several 'Nikon' examples already in the story from Go Pro to iPod and iPad, and I don't need to tell you about email and what mobile did to that...

Plastic? PLASTIC ? Are you SRSLY suggesting plastic? Plastic is as modern as a fax in communication. Plastic has as bright a 'future' as a steam-engine locomotive to trains. Plastic is to payments what Zeppelins are to air travel.

Plastic will die FAR FASTER than stand-alone cameras because with early mobile phone cameras the QUALITY choice was massively in favor of early stand-alone digital cameras. Better by a factor of many YEARS of tech 'catch-up'. But with PAYMENTS a good modern mobile payment solution UTTERLY DEMOLISHES the utility of plastic. TODAY. It is ONLY 'habit' that is obstructing the transition from plastic to mobile (and availability nationally by major commercial systems - do they accept mobile payments at retail level and does the national regulation allow payments above some silly minimum level etc).

With all that, the BANKING industry is a dinosaur that at LEAST needs slimming-down. It is in desperate need of modernization and efficiency. I do not personally think that ALL banks will go, but the majority will not survive the mobile revolution, while most banks happily lived through the plastic revolution.

Note that in the CAMERA industry there are plenty of 'infrastructure providers' like say Carl Zeiss in optics or Sony in digital camera sensors, who have done very well in this camera revolution regardless of what TYPE of end-user camera is used, stand-alone camera or cameraphone. Same COULD happen to various money-industry infra providers, national banks, payments providers, credit check companies etc. That INDUSTRY is needed but the consumer-facing organizations, gosh, BANKS? Credit CARD companies? Plastic? Gosh, those are SOOOOOOOO Zeppelins. A few will change (rapidly and smartly). Most will die.

Gosh service industries. Who was it, AOL Messenger who just died a few weeks ago. Killed by what? SMS text messaging (and later of course other mobile messaging platforms that came after it). AOL is Citibank or HSBC or Deutsche Bank.

As to NATIONAL CENTRAL banks - those that issue currency. You'd THINK that they are safe. Until you get it about virtual currencies. WHO regulates the Starbucks mobile wallet? Who regulates some virtual currency used in a massively online game? Who regulates airline miles. In fact go check out most mobile videogames - the WHOLE economy of 'apps' - they ALL have virtual currencies ALREADY TODAY. Worth literally BILLIONS. That nobody is regulating. VERY soon you can LIVE out of a virtual currency - with EXCHANGE RATES - that will be on mobile. And you won't need Euros or Dollars or Pounds at all. We are VERY close to that world as there already are some retail locations that take virtual currencies. There is even a cookie shop in London where you can pay for by a virtual payment METHOD (vs virtual currency) ie you can pay by Tweets.

Mobile ALWAYS wins. Mobile wins EVERY SINGLE TIME in hardware AND software, in products AND services. Mobile. Always. Wins. Including gosh GOSH in money!!!

Tomi Ahonen :-)

[Winter]

@Tomi
"WHO regulates the Starbucks mobile wallet?"

If it gets any traction (i.e., in the $B range), it will be regulated. Just like Bitcoin is in the process of being regulated. Countries cannot allow billions of dollars/euros etc. to change hands without the ownership being enforceable. Mount Gok is still a living memory.

[Michael]

@Phil W: With a phone supporting NFC and a phone and SIM card supporting Single-Wire-Protocol with a payment applet (say Visa or MasterCard) it is possible to do a payment transaction with the phone off, just like you do with a contactless credit card. In my country we can do any transaction wirelessly, but above a certain amount (~25 EUR) we need to enter the PIN in the terminal. There is nothing preventing the same for a phone with NFC+SWP.

[Phil W]

Thanks for the info Michael. Tomi, I believe you, it's just I'm a bit of a luddite! I do use banking apps and I would happily do internet purchases on my phone. It's just for point of sale payments that I have yet to see a burning reason to start using my phone. It's clear from what Michael says that maybe some of my concerns are unfounded, though.