Are your telecom services under the Christmas tree?

It’s an amazing world when the toymakers stop making toys for Christmas. But that’s what’s happening. This Christmas, if the NY Toy Fair is any indication, is going to be the first one where the toy industry has pretty much thrown in the towel and agreed that kids want bandwidth not Barbie dolls.

It’s an amazing world when the toymakers stop making toys for Christmas.  But that’s what’s happening.  This Christmas, if the NY Toy Fair is any indication, is going to be the first one where the toy industry has pretty much thrown in the towel and agreed that kids want bandwidth not Barbie dolls. 

Shocking, but true.  Don’t look for special versions of GI Joe this year, unless he’s tethered to something electronic. The gadget frenzy among adults and teens is hitting kids now, and with this, the choice of carriers is happening earlier and earlier in life.

For instance, Leapfrog, known for its MIND learning programs and reading tools, has jumped into the cellular business with its TicTalk Parent Controlled Cell Phone – designed for kids as young as 6.  It is designed to makes and receives calls only to/from approved phone numbers, and also monitors usage. If your kid has been good lately, you can reward him or her with additional minutes. Interactive text messages from the parent are allowed too. For good measure, there’s even a stopwatch function. Oh, since they are an educationally-oriented firm, Leapfrog had to spin this as good for learning – “Children learn important mathematical concepts and processes in the areas of numbers and operations (e.g., addition, division), algebra, geometry, measurement, data analysis and probability, and math reasoning (e.g., recognizing and describing connections between problems). Children begin to develop math skills as infants and expand upon their understanding as they get older.” How’s that for a cell phone pitch! TicTalk costs $99, plus a $10 activation fee; an hour of prepaid talk is $15 - 25 cents a minute.

None of this is necessarily new news.. Disney is teaming up with Sprint on a wireless phone for kids ages 8 to 12. Mattel and Nokia have their Barbie cell phone. And then there’s a Hello Kitty phone, the Firefly phone, etc.

IPods, working video cameras, customized gaming controllers …all of these are hitting the magic kid-dom in a way like never before.  If it does not have batteries, blinking lights, and connectivity, the toy will be kid-challenged this holiday season.

So we can say, “This is a start” but it underscores what we’ve been saying for a long time – gadgets drive communications purchase decisions.  All these toys come with a communications solution on board. And it’s not just limited to toys. Verizon is driving this lesson home in the adult market by embedding EV-DO into laptops and cell phones.  Skype is driving new cordless phones into the home – Olympia’s DECT phone is more than cool (it just can’t conference landline and IP yet). What is new is that these trends are just starting earlier and earlier in the human lifecycle. (Soon, we’ll be making decisions about what implant to give our newborn kids, no doubt.)

The emergence of stronger brands like Disney, ESPN, Virgin, eBay, and others into the communications space is showing who has the strongest relationships with their customers in order to drive innovation into that base, and the first rule seems to be to come up with cool gadgets to get the market’s attention.

So when people talk about the battle for the home, the battle is no more fierce than what ends up under the Christmas tree. Communications providers who have teamed with the major brands to launch specialty products into these niche markets will find a growth bump that builds a base to launch follow-on services.  Kiddie phones lead to kiddie games, which lead to kiddie ringtones, which lead to kiddie storytime, etc.

The problem we still see is that this is patchwork. Since the days when AT&T ruled the home phone market, the home has become a clutter of different approaches to the market, and the holistic, intermeshed, interoperable communications solutions have disappeared in the face of the networked consumer electronics explosion in the home.  So now you have Linksys vying for the whole home infrastructure alongside Microsoft alongside Sony alongside Time Warner, and the list just goes on.

When you talk about “Triple Play” and “convergence” and other such massive trends in your strategy meetings, don’t lose sight of the fact that you need to have a more consolidated and intermeshed gadget solution as well. Think in terms of hand-me-downs and shared power supplies and interworking parts.  The more you can build a converged gadget approach, the more you can build a truly long term sticky customer base, even when you start with the 6-year olds.

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