Coming of Age

American Demographics, Nov 1, 2004 by Noah Rubin Brier

Byline: NOAH RUBIN BRIER

High school graduations must follow a script: A decent marching band plays the national anthem, administrators give uninspired speeches and class leaders offer cliche-riddled send-offs to their be-tasseled peers. For instance, at a graduation in Connecticut this past spring, the class president spoke competently about "moving into the next stage of life," and how "the moments we shared together will last forever." Then, as she recited a litany of activities that had filled their days for four years - from the number of classes they had taken to the seconds spent together in the gym - her list came to a rather odd item: "The countless text messages back and forth in class," she read. Within the daily grind of high schoolers' lives, mobile technology had seemingly ensconced itself as a virtual necessity. The days of passing notes from desk to desk have obviously gone by the wayside, replaced with SMS messaging by cell phone.

Mobile phones have steadily become a technology that fewer and fewer people can do without. This may be especially true for the younger set. "They're texting at school under the radar screen of their teachers. It's a device that connects them very socially to their friends and keeps them very private from the adults that rule their world," explains Joanne McKinney, a partner and account director at North Castle Partners, youth marketing experts based in Stamford, Conn. North Castle, along with mobile marketing solutions provider Enpocket, recently launched the Mobile Youth IQ which aims to help the marketplace improve its reach to teen mobile users.

According to youthKnowhow, a London-based company that specializes in understanding youth behavior and applying this to develop better product and marketing strategies for wireless and new media companies, about 25.7 million kids in the U.S. between the ages of 5 and 19 are cell phone users. That's 40 percent of the population in that age range. As you might imagine, the balance tilts toward older kids. About 82 percent of 15- to 19-year-olds own mobile phones, versus 35 percent of 10- to 14-year-olds, and just 1 percent of 5- to 9-year-olds. By 2006, though, youthKnowhow projects that mobile penetration will reach 52 percent of the 5- to 19-year-old population. Add 20- to 24-year-olds to this mix and the yearly cell phone spend for 2006 could reach $16.7 billion among the under-24 demographic.

"The cell phone now competes with the wallet as the item you'd be most freaked out about leaving the house without," says Howard Handler, chief marketing officer for Virgin Mobile USA, a wireless carrier expressly aimed at the youth market. For Generation Y, the cell phone has become a defining technology, practically as important as the Internet. Clearly, today's kids have embraced the wireless world. This is a generation strongly attached to its mobile phones, and the technology is changing youth culture and social interaction. Whereas the mobile phone serves adults as a communication tool, for young people it has become a new means of expression and identity. "I believe in the next few years the phone and the service will be akin to the clothes that you wear and the car that you drive," predicts Handler. "It's going to be a complete reflection of who you are and what you're all about."

That reflection is already making a pretty penny for businesses in the mobile content market. Ringtone sales in the U.S. are expected to reach $146 million in 2004, according to In-Stat/MDR, and by 2007, the Yankee Group forecasts $1 billion in sales of this feature. And corporations from wireless providers to record companies are hoping to cash in on the mobile data market (see related story "Young, Mobile, Def" on page 23).

Among 5,500 mobile users surveyed by the Yankee Group, of the 80 percent of teens who have text messaging capabilities on their cell phone, 69 percent report sending or receiving at least a message a week. Of the 69 percent that text, almost 1 in 5 reports sending over 21 messages a week. "If we look at what you can do with your phone beyond voice, the most ubiquitous feature on a phone is text. If we look at teens and the youth market in general who have embraced IM on the PC, text is a natural," says Yankee Group senior analyst Linda Barrabee.

Wyndham Lewis, director of youthKnowhow, points to the American Idol TV show as a way to illustrate the popularity of text messaging in the U.S. "In the American elections in November 2002, 18- to 24-year-olds cast 8.6 million votes, compared with 16 million votes for American Idol." What's more, Lewis explains that even though young people could easily have voted for free using a land line, the majority chose to place their vote by text message. This is not entirely surprising, as more and more of America's youth are choosing to make their mobile phone their main voice communication medium. "Increasingly, people are just giving out their mobile numbers," says Lewis. This practice could have a huge impact on the telecommunications industry in the years to come.