In the opening scenes of In Good Company, released in late 2004, we see a young wireless marketing exec played by Topher Grace pitching his board of directors on the next evolution in mobile technology – a dinosaur-shaped phone for kids. The bit is designed to comically send up the notion that there would even be a market for such a device. But for those in the kids entertainment business, especially in North America, it’s no joke.

As handset and network capabilities continue to improve and proliferate, it seems like licensors with kid-friendly properties are inking new wireless application deals every week. The category is so hot right now that it was really just a matter of time before someone started looking at the phones themselves. Enter Mattel’s My Scene phone and the Firefly from Chicago, Illinois-based Firefly Mobile, both of which are launching in the U.S. this summer.

The handsets are meant to appeal to the lucrative tween demo. This generation of eight- to 12-year-olds is often touted as one of the most affluent in U.S. history, receiving income from both their parents and boomer grandparents. And according to Framingham, Massachusetts-based research firm IDC, they represent a big potential market. Lewis Ward, the company’s senior research analyst for wireless and mobile, says that of the nearly 20 million kids ages five to nine in the U.S., about 400,000 of them have phones. Looking at the country’s 21 million 10- to 14-year-olds, six million own a phone, and IDC’s research is projecting ownership to grow by at least 20% for both groups by 2008.

Ward’s colleague, Dave Linsalata, says two key factors are boosting tween phone ownership. One is the growth of prepaid phone plans, which make it more viable to push phones to a younger demographic because the child is restricted to using a preloaded number of minutes. The parent has more control, and there’s no danger of a surprise US$300 phone bill. The second element at work is the compelling argument of safety and security that phone ownership presents to parents; with a mobile, your child is always reachable.

But for licensors looking at this space, it’s early days yet. In Europe, mobile giant Siemens inked a straightforward licensing deal with Italy’s Rainbow to produce a range of Winx Club phones that hit Italian shelves in November ’04. There’s a different model for each Winx character, and Rainbow CEO Iginio Straffi says more than 10,000 of the US$250 phones have sold through so far.

But the My Scene model is the first tween-targeted licensed phone to launch in North America. It’s produced via a joint-venture between Mattel and Encitas, California’s Single Touch Interactive – a carrier-assisted brand operator that sets up and markets licensed phones, but is not a wireless carrier itself. Single Touch has already created a Hilary Duff handset that’s currently being presold to girls 13 and up on www.hilaryduffmobile.com, a site Single Touch administers. The company also offers an ESPN X Games handset and website, targeted at young male users.

Single Touch CEO Anthony Macaluso says what he looks for in potential phone licenses is a brand or property that has a community built up around it. Mattel’s My Scene dolls, which attract tween girls interested in fashion and socializing, seemed to fit the bill. The phone itself is designed to appeal to this demo’s desire to personalize everything. The jazzed-up Nokia 3587i model comes with three interchangeable My Scene faceplates and is preprogrammed with nine themed wallpapers and three ringtones. Destined to hit mass outlets in August (SRP US$79.95, including 90 minutes of prepaid airtime), the handset also has a full-color screen and complete wireless functionality with downloading capabilities.

The My Scene phone also takes the parental appeal of responsible usage and prepaid minutes one step further. On www.myscenemobile.com, operated by Single Touch, girls will find the My Scene Rewards Board, where moms can set up specific weekly goals for their daughters – household chores or school assignments, for example – that they will have to meet in order to earn extra phone minutes. If mom approves of her daughter’s progress, she can automatically recharge the phone on-line using her credit card. Of course, this also keeps parents informed about how much their child is using the phone.

Neither Mattel nor Single Touch would talk about the exact nature of the deal for the My Scene license, but they are marketing the phone together. And Bob Aniello, director of Mattel Ineractive, says Mattel designed all the graphics for the phone.

Because it’s not a toy, the My Scene handset will be available in wireless phone or youth electronics sections of most mass retailers and electronics stores in the U.S.

The Firefly phone line doesn’t currently offer any licensed models, but licensors with tween properties should still take a look because it approaches the market in a unique and compelling way. Fred Bullock, the company’s chief marketing officer, thinks the phone has struck a perfect balance between kids’ needs and parental desires. Polling 1,000 parents in 2004, Firefly learned that parents’ top two concerns about buying phones for their kids are that they won’t be able to control usage spending, and that the excessive functionality of adult phones gives kids too much freedom at too young an age.

So the Firefly was designed from the ground up specifically for kids. Intended for small hands, it measures just three inches in height and only comes with five buttons (including one speed-dial apiece for mom and dad). Unlike the My Scene model, this handset has limited functionality and requires much more parental involvement to set up and maintain. Parents can program the phone with acceptable outgoing and incoming numbers, thereby eliminating the possibility of calls to and from strangers.

Despite these restrictions, the Firefly isn’t lacking in cool apps for kids. Giving a nod to the appeal of customizability, the phone has a removable/interchangeable plastic shell that comes in eight different styles (including a pink heart print for girls and a slime design for boys), 12 ringtones, six screen settings, and it even lights up when it rings.

Bullock says research also indicated that men tend to make most cell phone purchases, and women find wireless stores – the typical retail outlet for cell phones – a little unwelcoming. Women wanted to be able to buy a phone for their kids at mass retail. And so in July, the Firefly will roll out at Target, as an endcap item in the chain’s electronics aisle. Enclosed in plastic Mason jar cases, the phones should retail for US$99, including 30 minutes of airtime. Target will also carry prepaid replenishment cards.

To seed the market, the Firefly has been available on local wireless carriers Cincinnati Bell and SunCom (in Southeastern states only) since mid-March. Bullock reports that Cincinnati Bell had to restrict sales to its retail outlets and remove the Firefly from its on-line store because demand proved to be overwhelming. And for its part, SunCom placed a second order two months early.

Looking ahead, Bullock says the priority is to build the Firefly brand itself. ‘But down the road, I think it would be quite natural to come up with a [licensed] version,’ he says.

And certainly, licensors with tween-friendly properties are thinking about the space. For example, Nancy Fowler, president of consumer products for DIC Entertainment, is looking at launching a handset for Trollz in 2006. In fact, she’s really just waiting to determine the average age of Trollz fans before choosing a partner. If the property skews older, Fowler will look at licensing a fully functional phone à la My Scene; if it’s on the cusp of eight or nine, she thinks the more controlled Firefly route is the way to go. One thing’s for certain, though. There aren’t that many players, whether licensors or manufacturers, looking at phones for kids younger than eight.

One of the few phones on the market for four- to eight-year-olds – the MyMo, manufactured by Chemnitz, Germany’s IT Plus Plus – had to contend with a strong consumer backlash in the U.K. market earlier this year. After a study released by the country’s National Radiological Protection Board recommended that phones not be given to children under eight because of fears about the possible effects of prolonged cell phone use on children’s health, distributor Commun8 pulled the phones from shelves to avoid further controversy. But the MyMo is still available in other parts of Europe, and to date, no study has presented any conclusive evidence that cell phones are unsafe.

Pimp my phone?
MTV and Motorola take branding one step further

The Hijacked by MTV phone is the first branded product Motorola has brought to market. Category marketing director Julie Cordua says her company was looking for a way to make its new MP3 play-enabled models more appealing to the youth demo. A group of MTV execs started playing around with the phones and pointed out some standard features teens would never use – for example, a text-message template saying ‘I’m in the office’ and a package of ‘Office Tools.’

To customize the experience for teens, the two teams created a new interface, wallpapers, screensavers and a game, and then translated the phones’ text-messaging templates into teenspeak. There’s a range of interchangeable skins available, so users can customize the external appearance of their phones, and exclusive Hijacked content can be downloaded from MTV International’s various websites and Motorola’s www.hellomoto.com.

The three-year partnership covers content development, on-air programming and promotional events, so it’s not exactly a typical licensing agreement. Dave Clark, VP of international marketing partnerships for MTV Networks International, says a Nick-jacked phone isn’t out of the question for the future. ‘It’s a little trickier when it involves kids,’ says Clark. ‘But we are noticing that the mobile phone is playing a bigger role in family communication and how parents stay in touch with their children.’ And Clark doesn’t think it will be very long before more property owners take this kind of approach in the mobile space.

In the meantime, the limited-edition Hijacked continues its international rollout, with launches in Latin America and Europe scheduled for the second half of ’05.