Moldy Peaches

The back-to-school rush has a new addition. Cell phones for primary school students. The concept seems to be fairly fool proof - provide youth with a phone for emergencies to call home, parent's work, to grandma's house or to the trusted neighbour. There is, however, more too it than just that. This is decision that parents should not make in haste.

Today's 9-year-old wants her own cell phone and companies like Mattel will be happy to provide one. The toymaker is one of many companies vying to connect with the preteen and younger market through mobile phones, services and accessories. The goal is not just to tap new revenue — it's also to establish brand loyalty early. This is very similar to why financial institutions launched post-secondary student lines of credit over a decade ago. Short-term bridging for the individual with an eye to long-term loyalty.

According to research from GFK's NOP World Technology, about 16 million teens and younger kids have cell phones, with the bulk of them older teens. But as the teen market gets saturated, cell providers and other companies are eyeing the younger set.

In February 2002, 13% of 12-to-14-year-olds had cell phones. That number jumped to 40% in December 2004, according to NOP. Some 14% of 10-to-11-year-olds now own cell phones. There are no comparison data for that group yet, but NOP is confident that its ownership rate is rising.

Even kids under 10 are using cell phones to call for rides home. "We're seeing cell phone growth from ages 8 and 9 on," says technology analyst Rob Enderle.

Mattel licensed its "My Scene" brand name, which focuses on preteens, to Single Touch Interactive. This month, they'll sell a full-service $79.99 cell phone with prepaid minutes priced at 25 cents each. Next year, Walt Disney launches Disney Mobile service through Sprint. It is designed for families with kids as young as 10.

Some companies are aiming even younger.

Educational tech company LeapFrog and wireless firm Enfora are launching the $99.99 TicTalk phone for children ages 6 and older. Firefly Mobile has a simple $99.99 phone with five "speed-dial" buttons for "mobile kids."

In addition to paying for upgraded phones, parents and kids are also buying ring tones, cell phone shells and hip carrying cases. Firefly's Web site, for instance, promotes a $12.99 wristlet purse to carry the phone, as well as colourful "bubble gum" and "limeade" exchangeable outer shells for the phone at $12.99 each.

That might be just the start. While Disney hasn't disclosed all its plans, some telecom analysts already are speculating

It is important to keep this in mind. When parents put phones in kids' hands, they're likely creating expectations. The child will want accessories and lots of them. The phone becomes a secondary purchase as children move to glamourize the phone. Also, every new purchase for a 6 year-old creates a lifelong cell phone customer. That gives both the service providers — such as Virgin, Sprint, Bell, Telus or Verizon — as well as brands with names on the handsets — such as Mattel's "My Scene" — access to new customers and sets the stage for future sales.

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