• by Diane Mermigas , February 12, 2011

The mobile revolution going on in the palm of your hand is just getting started.

With mobile platforms reaching critical mass and hitting a global tipping point, connected mobile devices are unleashing profound changes. Embracing and adapting these forces will enable companies to create digital strategies and business models that become their economic engine.

Identifying these trends provides a relevant framework for understanding and distilling the bombardment of daily developments. Consider some of this week's issues: Apple is creating a smaller, cheaper iPhone to compete with Google's Android; Yahoo's Livestand digital newsstand gives publishers, advertisers and consumers a seamless platform to distribute content across all mobile devices; Facebook is compelled to pursue a branded smartphone; PayPal's new micropayment service makes it easier to cash in using apps; and AT&T may acquire Dish network to monetize its wireless spectrum.

The most critical question to answer is, "What does it mean to my business?"

When the executive leadership of Microsoft and Nokia asked that, the world's largest handset maker and the world's dominant software provider sought to strengthen each other's weaknesses. The strategic partnership announced on Friday makes Windows the primary operating systems for Nokia, integrating every function from search and maps to content and app stores.

This same dynamic will drive a steady stream of strategic alliances over the next 18 months as companies seek to fortify their bases and are swept into technology's wealth creation and destruction cycle. Hopping on digital media's fast track requires more than any one company has to give.

There are three underlying drivers to the most important change that is occurring in mobile media:

*Using apps across all devices as the most effective connection to consumers, a gateway to paid products and services, target marketing and research. Smart companies leapfrog the pitch and go straight to the transaction.

*Capitalizing on individual relevance drives choice and rationalizes spending on products, services and content. Nothing is more relevant than key factors (weather and traffic), news (taxes and education), affinity (sports) for consumers. That makes local golden. It goes by another name these days: social media.

*Understand how and why consumers use their mobile smart devices. All the razzle-dazzle doesn't matter if devices don't do what tech-empowered consumers need for them to to.

Surely the most unifying, electrifying application across all mobile devices has been social media lead by Facebook, universally credited with fueling and facilitating the Egyptian revolution -- though only 20% of the country has Internet access.

But the connectivity, sharing and viral nature of Facebook, and mobile interactivity in general, are barely tapped to create commercial fortunes. Half of Facebook's more than 200 million active users (of 660 million global members) are mobile. Although Facebook advertising revenues could more than double this year to $4 billion, a social setting should lend itself to new forms of interactive marketing and immediate commerce.

The time spent on various mobile functions tells the story. Nearly half of mobile users' time is spent on social networking, playing games, using maps, etc. Another one-third is spent talking on the phone or Skype, about 12% of time is devoted to Web applications and the remaining 9% on email, according to AppsFire.

Matching how businesses and consumers use mobile connectivity is the challenge.

Amazon's recent $175 million investment in LivingSocial and Starbucks founding CEO Howard Schultz's new board seat and undisclosed investment in GroupOn doesn't automatically make either company an expert in interactive marketing and commerce. Creative use of apps should provide a short-cut from pitching to transacting. That, plus the increased use of smart phones as a remote control for other devices create the groundwork for a mobile marketing revolution. Mobile gross merchandising was valued at about $2 billion in 2010.

Even with the U.S. smartphone users topping 73 million, representing 31% of the total mobile user population, according to eMarketer, the mobile revolution relies on a more diverse spectrum of connected mobile devices, including tablets and dual screen smartphones.

It represents what Mary Meeker calls "the early innings of a massive phenomenon." The veteran Morgan Stanley Internet analyst turned partner at the heady VC Kleiner Perkins provided a road map for companies to recast their businesses around the new emerging dynamics. Foremost among them:

*"SoLoMo," the shorthand reference coined by Kleiner Perkins founding partner John Doerr for the convergence of social, local and mobile.

*"Gamification," the ultimate way to engage a new generation of audiences. It's FarmVille, CityVille and other popular Zynga-inspired features. Although e-commerce is a mere 4% penetration of total retail sales and just 13% in advertising revenues spent online, Meeker estimates it is part of a $50 billion global revenue opportunity, surely spurred by mobile's relative efficiency of 100% reach and 90% targeting compared with other ad-supported media.

*Rapid adoption of e-tablets in education, business and other enterprise will super charge the exchange and maintenance of global data bases in all industries and an all aspects of personal life, beginning with consumer health. The pervasiveness of a mobile, instant information-based world will be a catalyst for exciting, lightning fast change that has a lucrative business upside.