July 7th, 2005

Connecting With Kids, Wirelessly

By Yuki Noguchi
Washington Post

New cell phones are extra-small to fit children’s hands, with "mommy" and "daddy" buttons for one-touch dialing. They come in colors called X-Ray and Bubblegum. Still others are set to feature animated characters on the display screen and have educational software built right in.

Cell phone companies, having captured most of America with lucrative service contracts, are coming for the children.

Yesterday, Walt Disney Co. announced a deal with Sprint Corp. to offer wireless service directed at 8- to 12-year-olds, joining at least two other companies competing for the same age group.

"There are a lot of parents trying to decide how to take advantage of cellular phones to keep connected to their families," said Stephen H. Wadsworth, president of Walt Disney Internet Group, which plans to launch the Disney Mobile service next year. "Obviously, it needs to be something that appeals to kids."

Appealing to kids is rich terrain for wireless companies, which have already locked up nearly 70 percent of the U.S. population through service contracts. In the past year, the industry’s biggest growth has come from 14- to 24-year-olds buying from specialized brands like Virgin Mobile or Boost Mobile LLC. Now, 55 percent of teens have wireless phones, so companies see green in the even younger market, where 25 percent of kids 12 and under own mobile phones, according to the Yankee Group.

Since March, Firefly Mobile Inc. has signed up more than 100,000 users under age 12. Enfora LP plans to sell phones this fall equipped with LeapFrog educational software directed at the 6-and-over crowd.

"It’s a segment of the market that’s under-penetrated," David Bottoms, vice president of strategic partnerships for Sprint, said of the "tween" population of 8- to 12-year-olds. That demographic is 20 million to 30 million strong in the United States, according to analysts. Disney can tap that base because of its vast library of kids’ entertainment, he said, and because "Disney is considered safe and trusted."

Cell phones are only the latest product to target the elementary and middle school age group, with companies racing to get everything from snack foods to debit cards into kids’ hands. Because of their cost, mobile phones pose a special dilemma for parents. On the one hand, putting wireless devices in younger hands can ease the demands of scheduling on the fly and monitoring whereabouts. But some say the added distraction—and the expense—raise a question about whether cell phones should be introduced to children at a young age.

Kids can rack up charges on cell phones without parental consent, said Morgan Jindrich, director of the HearUsNow.org Web site for Consumers Union, which collects consumer complaints. One mother recently wrote to complain that her child rang up $87 in Internet usage and download charges on her cell phone bill, Jindrich said.

Parental controls and simple design are perks that Disney, Firefly and Enfora are touting to appease parents’ concerns. Firefly, for example, designed a smaller phone that comes with only five large buttons instead of the usual numeric keypad. Because it is a simplified device that only makes and receives calls, children cannot exchange text messages with friends during class or download pornography off a wireless Internet connection.

Jeannie Pfeffer, a single mother of two children, ages 12 and 13, said she rejected the idea of putting a normal cell phone in the hands of her children. But she warmed to the idea of buying her kids $129 Firefly phones, which she can program so they can dial only a list of numbers she controls.

"It’s a really nice safety feature," said Pfeffer, a Mills River, N.C., resident whose kids call her with their phones when basketball practice finishes early. At $20 a month for each account, the cost was manageable, said Pfeffer, whose signature ring tone on her kids’ phones is "The Entertainer." "This gave them an opportunity to show me that they would be responsible enough [to own a phone]. The teachers don’t complain a lot about Firefly because they can’t just call anybody."

Tracking one’s child may eventually be another selling point for parents, said Mark Weinzierl, president and chief executive of Enfora, a start-up cell phone provider based in the Dallas area. While a tracking service will not be available in Enfora’s first version, the company may add such a service with later models, he said.

For parents concerned about children habitually losing their phone, Firefly is negotiating potential insurance arrangements for child-owned cell phones, said Robin Abrams, chief executive of the Chicago-based company, which conducted 3,000 focus groups and surveys of parents and kids before launching its service.

Selling the product to parents is key because, in most cases, they pay the bills. Of cell phone users between the ages of 13 and 17, 53 percent get service through a family plan—a payment method that allows parents to add children to their accounts for as little as $10 a month, according to the Yankee Group.

Disney, which is disclosing little about its specific marketing plans, said it will present its service in the form of a family plan, offering Mom and Dad as well as their kids appropriate phones, all on one bill.

The move to supply kids with phones is a clever one for cell phone companies, said Roger Entner, an analyst with Ovum, an independent research firm. Parents have already shown their willingness to purchase portable gaming devices for young children, so a cell phone may be no different, he said. Besides, entertainment companies already know how to launch an effective marketing campaign.

"Little kids can be relentless if they see something they want," he said. "They won’t give up."

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