Kid Phones - a Risky Business

· Kids aspire to be older yet have specific needs and limitations

· Because of the small kids-phone market size, devices are often limited in variety and appeal

The kid’s phone market is a tough nut to crack. On the one hand kids would like to be part of the mobile world like their friends, parents and older siblings, yet they have financial limitations, and parents would like to put controls on their children’s mobile usage.

The mobile operator would like nothing more than to expand its customer base by adding younger consumers as potential life-time customers. Yet mobile operators, who traditionally have not excelled at customer segmentation, are focusing more of their efforts targeting other more lucrative customer segments in an attempt to expand mobile data usage. At the same time operators are trying to limit the number of handset SKUs and control phone subsidies, a task made increasingly difficult as advanced data-capable phones typically require choice and subsidy to increase their mass appeal.

Lost in this article is that notion that kids aspire to be older. So while creating software and applications specifically for children makes sense, a handset designed specifically for kids is a tricky business. Kids typically aim to be like their older friends and family members. Therefore, while phones that appeal to mobile youth and young adults may not always appeal to children, the opposite is almost never true. Without scale, the economics of making a kids-only handset comes into question - typically yielding fewer handsets at a higher price and increasing a specific product’s risk.

Well known is the notion that kids seek out “cool” products. What should also be recognized is that when companies try to make cool devices that appeal specifically to kids, the strategy may backfire and the devices can generate a distinct “uncool” backlash.