Innovations in mobile technologies are making the mobile Internet increasingly ubiquitous and powerful. Consumers are drawn to the mobile Internet because it can be highly contextual and leverages information such as geo-location, presence, and user-specific information to deliver a rich and intensely personal experience.

As my colleague Julie Ask pointed out in her new report eBusiness: The Future Of Mobile Is User Context, companies that produce consumer products/services will increasingly take user context into account to produce convenient products with relevancy and immediacy for consumers. Already location-aware applications are becoming more and more ubiquitous; our movements as individuals are invariably documented somewhere.

Our phone is packed with sensors that can gather more contextual information about its surroundings than anything we’ve seen before. Sensors such as GPS, accelerometers, gyroscopes, NFC, and high resolution cameras are now commonplace in smartphones. Emerging sensor technologies like barometer, microbolometers, and chemical sensors will provide even richer user context information.

Soon your phone will not only know where you are, but what you are doing, how fast you are moving — and if Apple gets their way, the rate your heart beats!

Mobile Internet enables the mass-scale collection of such user context data. Mining of this data gives rise to transformational business opportunities. In fact, it is not too far-fetched to imagine an intensely personalized Internet experience unlike any that we’ve seen before. Soon, the concept of “going to a website” will become obsolete. Our children will no longer need to “surf the Internet.” Personalized content and services will come to them magically via the little device that is known as the mobile phone. The Internet, as we know it today, will transform into a platform to deliver highly individualized experiences to users.

Will consumers sacrifice privacy in such a world in exchange for the many benefits and conveniences of the mobile Internet? Will privacy, as we know it today, still exist when the mobile Internet reaches its full potential? One thing is clear, consumers will favor a rich, relevant, and highly individualized mobile Internet experience. Even if app producers or operators offer an option to block the collection of user contextual information, consumers will simply not exercise that option if it will adversely impact their mobile experience. Although many people regard privacy as a fundamental right, comparatively few actually translate that into everyday practices, especially when faced with tradeoffs between privacy and mobile convenience.

To help consumers retain some semblance of privacy, one must explore the role of regulatory oversight. Many countries today have privacy regulations, but few have been updated to take into account new capabilities like mobile services. Europe’s Article 29 Data Protection Working Party issued an opinion in May this year that officially put information collected by phone and Internet companies on customer locations in the same category as names, birthdays, and other forms of personal data. This is a major step forward for preserving user privacy. Other countries will likely follow suit but it might take a long time for that to happen.

The role of regulations, specifically, can limit who can be in the business of user data collection and mining. Just as PCI demands rigorous security practices from those who handle consumer credit card data, regulations can demand a similar level of competence from companies that collect and mine user contextual data. Furthermore, regulations can restrict what a business can and cannot do with users’ private context data. For instance, it may be perfectly ok to correlate location and time-of-day information, but it will be deemed unacceptable if a third stream of user context data is introduced.  

Technology can serve as another key safeguard. Just as homomorphic encryption allows people to aggregate two functions without knowing the original input, new data mining technologies may allow meaningful statistical results without access to original raw user data.

It is not clear when the regulatory or technological safeguards will be in place to protect consumers on a worldwide scale. Consumers, lured by the shining promises of the mobile Internet, may be blind to the privacy risks. At the same time, technologists and firms in the mobile Internet market today have only a social responsibility to consider user privacy when they craft their next fancy mobile strategy. Are we headed toward a dark place where everyone is perpetually connected but none can keep anything private?

What do you think?