One of the best ideas for cell phones is to use them to handle small monetary transactions. For example, Japan has been using a combo of near field communications, cell phones and special online chips to identify customers and charge customers as they wave their cell phones near subway turnstiles. One wave of your cell phone and the price of the ticket is automatically debited from your account.

O2 in London just finished a similar trial using special cell phones and the electronic payment system in the London underground. The trial was a glowing success with 80% customers reporting that would like to use this system to pay for their tickets. Sadly the trial will not be rolling out to mass adoption. The problem is that the electronic and payment systems required for commercial deployment is too much for now. For example, one of the reasons that the system works in Japan is that the largest cell phone companies also own large banks. Without all of that financial infrastructure in house, it will be a while before anyone finds a successful business model to handle multiple small transactions.

But keep your fingers crossed that some bank or credit company (or maybe a very plucky startup company) will make the leap.

Some days it is tough to be the big guy.

Nokia has reported two bits of bad news. The first was that it was predicting a weaker than expected Q3. This loss of revenues is due to price squeezing from its low-end competitors. Nokia has decided to take the high road, literally. They don’t plan to reduce prices to compete.

The second bit of bad news comes from Nokia’s high end market. O2 has decided not to offer Nokia’s latest smartphone, the N96, to their customers. O2’s problem is that they don’t want to divert their money from their subsidy deal with Apple for the iPhone. O2 is way more concerned about keeping Apple happy by hitting their sales targets than working with Nokia on its latest me-too product.

Nokia has problems on the high and low ends. The real question is how long can they survive in the middle.