Nokia is racing to beat Motorola to market on a new wave of cellular products. A product that could literally require every cell phone user around the world to upgrade their phone. What is the product?

Is it a new 8.0 mega pixel phone? ………….No
Is it a camcorder phone?………….No
Is it a 3d phone?………….No
Does the phone have a projector built in to it?………….No
Will it pay your taxes?…………. Almost! and then some.

The killer product is a cell phone that is an electronic wallet. Picture a phone that allows you to literally leave your wallet at home. No credit cards or debit cards to carry. No need for much cash. Its all accessible via the phone.

This is by no means a new idea, but no one has been able to launch it successfully yet. The first signs of such a product that I can trace (outside of science fiction) date back to CES 1994. At that time, Bill Gates provided a demo where he promoted the concept of a wireless mobile device that would function as a cell phone and an electronic wallet.

The combination has proved to be almost as illusive as the holy grail. Motorola actually demonstrated a concept product that could do just this at CES in 2005. At the time, they were only looking internally and had not partnered with the larger payment transaction companies. As such the unit on display seemed to lack the key requirement – Very Strong Cryptography.

Now its more than a year later. Nokia, whom undoubtedly saw what Motorola was working on, has unleashed a product that will ‘turn cellular handsets into electronic wallets’.

They’ve done it right by partnering with Visa. Essentially, this is the largest credit card payment company working with the world’s largest cell phone company. They are piloting a project in Malaysia.

Nokia will gain bragging rights for being the first in the ‘market’. The serious question to ask though is, “Who can be first in Europe and North America?”

Motorola has not offered up any progress in this category since 2005. Nokia is going public with this pilot. Motorola is strongest according to Motorola in North America, and Nokia is stronger in Europe. Nokia holds market share leads in both areas.

PayPal just recently released a technology that allows wireless payments to take place using a PayPal account. This is a very interesting start as PayPal’s service is capable of processing transactions from other card processors, however, even though their services are widely accepted on the internet, physical merchants are not ready to accept payments from a PayPal account at the cash register.

Will Nokia trump Motorola in North America? Will Motorola make it to market with a concept they demonstrated first again?

We’ll watch and see if history repeats itself.

For more information on Electronic Wallets, see our three part series on ‘The Dark Side of Electronic Wallets’

Nokia, Visa launch phone payment project – Wireless World –