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The End of “Kid Phones”?

In early April of this year, Verizon Wireless and AT&T’s Cingular division announced they were putting the brakes on the so-called “kid phones” in their respective product lines. For Verizon, the model was the LG Migo, while Cingular carried the Firefly Mobile phone. Neither carrier now plans to offer kid-focused phones at retail locations, but the Firefly device will still be sold at some mass-market retailers like Target and Kmart, as well as through the Cingular and AT&T Web sites.

While the role kids play in the consumer market is important, the Migo and Firefly handsets have not sold well through Verizon and Cingular. NPD data shows that the phones were by no means top sellers; in fact, they never ranked among the top 50 best-selling phones.

It’s important to note that operator-owned stores are the most important channel for carriers. In 2006, 61 percent of all new handset purchases were made via this channel. However, due to low sales volumes, these phones were clearly not benefiting the carriers to the degree that they were taking up valuable self space.

Perhaps the most important feature of these devices among parents was found in their very limited capabilities - these phones can only call, and accept calls, from certain numbers; plus, they allow for no additional data services. This lack of data-service support was another big negative for carriers considering how kids typically use their mobile phones. Sixty-seven percent of kids age 2 to 14 reported paying for cell phone digital content and 27 percent have had their parents help them download content to their cell phones.

Text messaging, for example, is the most popular data service for all age ranges. NPD data shows that nearly 40 percent of all wireless subscribers regularly use SMS. Among younger age demographics, 60 percent of 13 to 17 year olds used text messaging monthly, as did 67 percent of consumers between the ages of 18 and 24. Verizon Wireless recently stated that it will direct parents to the LG 3450 if they are looking for a device with limited capabilities. This handset allows phone calls and text messaging, but does now allow access to other data services.

A third and perhaps final decision point for Verizon and Cingular is the outcropping of new MVNOs whose sole focus in on the kids market. Disney Mobile offers a service aimed at children and parents, and another MVNO, Kajeet, has been aiming at the so-called “tween” market for kids between the ages of 10 and 12. Both of these service providers not only market directly to kids, but they support it with phones, plans and services that match the unique needs of kids and parents.

We should keep in mind that phone features and services can be fine tuned for kids, but separate devices with limited capability are by and large neither necessary, nor desired by consumers. Kids today want to do more than chat with friends, but parents require control over access and spending. With the myriad options available today, both of these two objectives are clearly still within reach.

—NPD’s Wireless Research Team