Little big spenders

So much so, in fact, that according to the Wireless World Forum, the average ten-year-old will consume nearly $30 000 worth of mobile technology and services in the course of a lifetime.

By the time that ten-year-old reaches the age of 35, he or she will have used up more than half of his or her lifetime`s mobile spending. Which means the youth market is a potential goldmine.

Savka Andic, research associate at the Wireless World Forum, says within the past year, the SA mobile market in the 15 to 24 age group has attained almost full penetration, leading to a fall in pricing for voice services and an increased use of data services.

Younger children are fast acquiring handsets, too. A recent IDC study also noted significant growth in the number of younger children using mobile devices. It said: "The wireless market for young children aged five to nine years old is one of the very last subscriber frontiers and is projected to grow from under 800 000 users in 2005 to over eight million subscribers in the US by 2010."

The youngest users can`t afford to buy their own handsets, but parents are happy to foot the bill. The report pointed out: "Wireless services for young children can provide safety and security for parent and child, enrich the bond between child and non-custodial parent, serve as a child`s electronic `security blanket`, support educational and entertainment content, and can be an important new anti- bullying tool."

In SA, new GPS-enabled services such as Vodcom`s Look4me allow parents to track their children`s whereabouts via their cellphones.

Stephen Blewett, MD of Altech Autopage Cellular, says the youth market generally wants different functionality from what older users` handsets have, so they are not always happy to have a `hand-me-down`. The younger set wants handsets that can handle a variety of mobile content, and which have cameras with video functionality. They are more likely to use their handsets for multimedia, SMS and instant messaging than for making voice calls, he says.

Blewett says while most youngsters may already have cellphones, he points out that this market is by no means saturated, since the youth market will upgrade whenever possible, to acquire the latest fashions and features.

DESIRABLE TECH

World Wide Worx`s recently-released "Mobility 2006" survey, conducted with the backing of Virgin Mobile, First National Bank and Verizon Business, found that youths are among the highest users of cellphone cameras, MMS services, radio and music. A recent Sunday Times, HDI and Monash South Africa Generation Next youth brand survey established that tweens, teens and young adults rate Nokia as the coolest brand of cellphone, followed by Samsung and Motorola. Vodacom was rated as the coolest service provider, followed by MTN and Cell C.

The Wireless World Forum`s 2006 Mobile Youth report, which looked at mobile users between the ages of five and 24, says the youth market is shaping both the content and character of tomorrow`s mobile technology markets.

The report noted that young consumers were leading the drive to greater innovation in mobile data services. It said: "In fact, youth spending on data services accounts for nearly 50% of all mobile expenditures in most advanced mobile markets. That`s a total of $15 000 on non-voice services over the course of our mobile child`s lifetime."

With youth spending on mobile services passing $100 billion in 2006, the sales of products tailored for young consumers will face stiff competition.

HOW TO CASH IN

In numbers, the youth market is a large one, but their spending is relatively limited. An offering has to be compelling or generate long-term loyalty to make real profits.

World Wide Worx`s survey found that on a pure age-group level, the 16-24 age group makes for more than a third of the cellular market, but only about 12%-15% of market spend. The report notes: "This means they drive down ARPUs in the short term, but once employed, their contribution to revenue shoots up. There is a very strong correlation between income and what is spent on cellular usage."

The Wireless World Forum recommends that cellular companies focusing on young consumers change focus from early adopters and big spenders to engagement with "high lifetime value segments such as low spending youth".

Andy Brauer, chief technical officer at Business Connexion, says he`s been forecasting trends for years, and sees big changes ahead in the mobile space. Convergence and mobile TV come instantly to mind, but there are no limits to what could develop in this space, he says.

"It all depends on imagination, what people want and what they can afford."

Fun and fashion will sell. Brauer points out: "The global ringtone market is worth an estimated $70 million already, and is growing all the time on the back of what I call the `Crazy Frog syndrome`," he says.

Brauer says instant messaging on mobile is likely to expand into multimedia sharing via the same platforms. Mobile TV is likely to spawn a whole industry dedicated to creating short movies and soapies for mobile.

And protecting kids from the dark side of mobile - such as paedophiles luring children to meetings or porn via cellphone - also presents business opportunities, he notes.

"The converging global telecoms market is forcing traditional telecommunications companies, whose primary income is from voice traffic, to evolve or die, as alternative technologies and applications make inroads into their once sacrosanct revenue streams," he says.