Really good article from Fortune about how large web companies fear the rise of mobile as it has the potential to severely disrupt their existing business. There are lots of examples of this (Google, Facebook, Microsoft, Nokia, the music industry, the film industry, newspapers and magazines etc. etc. are all suffering as users switch from traditional channels to web and now to mobile).

Yet more evidence that all businesses need to have a strategy for mobile, as it has the potential to drastically enhance or disrupt any business.

Also of note is the focus on user experience, and the fact that simply relying on a mobile version of a website just won’t cut-it these days. Smartphones and tablets are so personal to the user that you need to provide a much more personal and tailored user experience on these devices. Apps and mobile-specific websites are the answer.

One word is keeping executives at Amazon, Facebook and Google up at night: mobile.

Web businesses used to disrupt traditional businesses. But today, no large web business is safe from mobile first disruptors. The celebrated web disruptors – the likes of Facebook, Google, Flickr, and Amazon – are now being challenged by mobile-focused businesses.

Take Facebook (FB). When compared to the elegance and intimate focus of Path, Facebook feels like a generic and sprawling mess. Google (GOOG) Maps, for another, is one of the most popular web services on the planet, but it feels utilitarian and bland when compared to the more playful, personal, and mobile-optimised Foursquare. Web photo sharing services Flickr (YHOO) and Picasa are disrupted and challenged by nimble mobile offerings by the likes of Instagram.

Mobile-first businesses are forced to prioritize and focus, and in order to survive they must design simple and elegant services. This gives them core advantages in a world that’s quickly going mobile and where sharp strategic focus coupled with first-class service design is critical.

Recent figures show that mobile usage is not merely growing, it’s exploding. In its latest earnings report, eBay’s (EBAY) CEO John Donahoe revealed that eBay mobile and PayPal mobile are predicting $10 billion in transactions this year — each. Some 102 million people accessed Facebook solely from mobile in June, a massive 23% increase over March. CEO Mark Zuckerberg said in July that mobile-connected users are more active than desktop-only users, and the company is now trying to turn itself around to become “mobile first.” (Buying Instagram should help.)

Mobile games developer Rovio, with a billion downloads for its Angry Birds game, recently also claimed top spot with its latest game sequel, Amazing Alex. The mobile payment start-up Square is already processing over $6 billion in annual transactions, and the 2-year-old company is now valued at $3.25 billion. The most significant action is in mobile, and the business evidence is now there to back up this general claim.

In a global economy, companies with high ambitions look beyond their domestic markets, and in most countries in the world, significantly more people have access to the Internet via their mobiles than via computers. Russia, Indonesia, India, Africa, Brazil — these are examples of large mobile-first economies.

For most people on the planet mobile is not only the primary way to access the Internet, it’s the only way. To have a chance of reaching these customers, mobile services must be built. What we often overlook in the West is that even here, many people only access the Internet through mobile. Of Americans with mobile phones, 31% only or mostly use the Internet on their mobiles. More than a third of the people in the US don’t have Internet access at home, but nine out of ten have a mobile phone.

In the West a common starting point for mobile services is to shrink down a desktop web site. This is a bad idea for many reasons, and especially if you’re targeting more diverse – and often mobile first – markets. Through mobile, there’s a massive opportunity to create more intimate and personal bonds with users.

The mobile medium itself is emotional and personal — to a much larger extent than any other medium. Users have their mobiles with them at all times, even at night (four in five US teenagers sleep with their mobiles in or next to their beds). People collect their most important gems and intimate secrets on their mobiles. They accessorize and stroke them. And crucially, the mobile is their constant connection to the important people in their lives.

A perfectly popular utilitarian service that makes great sense on the web is likely to feel cold and machine-like when experienced through the emotional beacon that the mobile represents. Designing for people’s hearts makes perfect business sense too. If you manage to design services for user’s hearts in addition to their minds, these users will reward you with loyalty and profits. Apple (AAPL) is the obvious example.

Tablets are being adopted at a faster rate than any other consumer technology in the past – including mobile phones. Tablets also have some properties that other technologies don’t. The large, lush screen puts very high demands on the visual experience. Direct manipulation and gesture based interaction is expected, and anything that resembles desktop software will feel out-of-place on the tablet. The tablet is also the only device in addition to the phone that is of use and relevance in the three main places where people tend to spend their time: at home, at work, and on the move.

The tablet’s core properties — the vibrant display, its direct interaction language, and its ability to fluidly travel across locations and across work and personal tasks — makes it the perfect platform for pushing boundaries. Many of our clients are now experimenting and pushing boundaries on the tablet, then leveraging the learnings across other channels.

From a service design perspective, at the moment the iPad is pretty much the only tablet game in town. But that will soon change. Samsung, Amazon (AMZN), and a range of Microsoft (MSFT) Windows 8 tablets will give the iPad a good run for its money, and the iPad’s dominance will lessen over time.

While the tablet is the latest mass-market consumer electronics category of critical importance, evolution will not stop there. The next large-scale computing frontier will be about wearable devices and embedded computing. Business leaders should expect more digital platforms, fragmentation, and innovation – not less.

When the web became important enough, companies responded by staffing up to deal with the web “channel.” When mobile popped up as the latest must-have, companies responded to this digital evolution by putting in place mobile teams to deal with this latest channel. But where does the channel-driven organization lead? It definitely leads to an ever-growing range of channels. Clearly a tablet channel is needed. Soon a wearable channel is needed, then an embedded channel. The organization becomes sprawling and increasingly complex. There is bickering about which channel certain new devices belong to.

But the most dangerous result of the channel organization will be the effect on customers. Inevitably, the organizational silos will start to confuse and frustrate customers. They will be spoken to and dealt with differently depending on which channel they use. Given that the most valuable customers tend to use multiple channels, this can become a big business problem. Fundamentally, end users should take centre stage, not platforms or channels. Businesses should focus on understanding and designing for customer needs and behavior, especially in a mobile context.

The reasons to adopt a mobile first strategy go well beyond the exploding mobile usage numbers. To name a few:

Drive focus and excellence. Successful mobile-optimised services must be focused and elegant. Prioritization and strategic choices have to be made. This will help you clarify your offering, focus and strategy.
Find new customers. A large proportion of your future customers are mainly mobile.
Learn new tricks. There’s a significant difference between yesterday’s “software” experiences that target PCs, and tomorrow’s post-PC experiences designed to fluidly scale across platforms. Focusing on the latter will help you master modern service design.
Disrupt yourself before others do. The innovation you do on mobile platforms can directly influence and benefit your other target platforms too – digital and non-digital. If you don’t find ways to disrupt your business using mobile, it’s likely that other mobile-focused companies will.
Be relevant at all times. Mobile will make you atomize your service to fit into the daily life and tasks of users.
Get closer to your customers. In mobile you can create a stronger emotional bond, and a mobile focus will help you organise and design around users rather than around software platforms or “channels.”
Become better at design. The personal and lush mobile medium demands first-class design, and if you aspire to have a leadership position in mobile you will have to focus on design.

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