10 Requirements to Reach Mobile Commerce Critical Mass because of Apple iPhone (and why the Nielsen report is dangerous)

Implications: In this article, I give a preview of my 11 step analysis to mobile commerce usage, driven quickly forward by the introduction of the Apple iPhone, then adjust it slightly for mobile Internet.  But I was appalled by Nielsen's failure to be able to correctly parse the differences between the hideous UI (user interface) and consequent usage of the Motorola RAZR and the elegant Apple iPhone experience.

Analysis: Through my consulting efforts for top platform companies wishing to enter the mobile space, I have had the opportunity to develop 11 key requirements to hitting the mobile commerce tipping point.  These elements are:

1) Software User Interface
2) Hardware User Interface
3) Data Speed (3G, then 4G)
4) GPS and LBS (Location-Based Services)
5) Mobile Payment Options / Security / Ease
6) Mobile Promotions and Marketing
7) Price of Phone and Plan
8) Branding of Mobile Commerce
9) Mobile Retail Sites
10) Consumer Adoption
11) Time

I then rank each of these areas on a 1-10 basis.  Though I only reveal the full rankings and the components that go into this to companies that enlist my consulting services, I can tell you that the components that hold us back the most are mobile payment options and mobile retail sites, neither of which are entirely necessary for pure mobile Internet usage.  The most advanced elements include the software UI, something that has rapidly improved by the Apple iPhone's Safari and App Store, and a greatly reduced price for the phone.  Data speed is improving rapidly, and Mary Meeker believes that we will near critical mass of 21% penetration in 2009.

The Nielsen report, however, is tremendously dangerous as a gauge, since it limits its scope to usage, something that can completely mis-predict the market which is composed of vastly different segments. 

And it completely misses the boat when it says that the Motorola RAZR is the leading mobile Internet phone in the U.S.  This is a tragic error, made by simple analysis.  The iPhone passed all mobile OS platforms already, beating the Microsoft Mobile OS platform when it had only 2% smartphone market share, then taking out Nokia's Symbian OS platform, which dominates the market last Christmas.

The gauge is not users, it is usage.  What matters, especially now as we gauge future mobile Internet usage, is how Internet is being used on a phone.  Sure, Motorola RAZR users may have Internet on their phone and use it occassionally, but iPhone users use the Internet constantly.  This usage far outstrips the pitiful experience on the correctly deemed "archaic" RAZR.