New research from W2Forum shows just how valuable the 5-24 year old market is to mobile phone companies. The Youth market will spend €13.4 billion on mobile data services this year, increasing to over €20 billion in 2006.
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Youth spend up to 13.5% of their disposable incomes on mobile products in developed markets.
The importance of this demographic segment is reflected by all the major companies within this area, having some Youth strategy. In developed countries, between 9-13.5% of all Youth disposable income is spent on mobile products. But the Industry doesn't know who or why. As the mobile market saturates and moves into a value phase, companies must start to compete through product differentiation and brand. To successfully do this you have to know your customers and their reasons for buying.
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Growth in new products such as Java Games and MMS will need to displace spending on existing mobile or traditional Youth products such as music, clothing and tobacco.
Chocolate sales fell for the first time in 50 years in the UK, from €1.84bn to €1.73 bn , as a result of the surge in Youth spending on mobile products.
To be successful in marketing new products, such as Java Games and MMS, companies will need to understand how they are going to displace spending on existing mobile or traditional Youth products such as music, clothing and tobacco.
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Text messaging will continue to remain the most valuable and popular service for the Youth market.
Many analysts project that text messaging will decline in the face of competition from more advanced messaging technologies; this is contrary to our research findings. Text messaging will continue to remain the most valuable and popular service for the Youth market, accounting for 85% of all Youth spending on value added services in 2006.
Despite being content rich and more advance technically, the Industry has not yet found the real added value of Multimedia over Text Messaging. Youth will buy new handsets and use the camera functionality but not necessarily Multimedia Messaging. The Youth market for these services will be worth €426 million in 2006, but only 43% of this value will be outside of Asia Pacific.
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Next to Text-Messaging, Ringtones will be the largest Youth mobile content market.
The Industry will mature from a cottage industry to one dominated by a few players with prior music content authoring experience. Youth spending on Ringtones will amount to €2.3 billion by 2006 with Japan, Korea, USA, Germany and the UK as the 5 largest markets.
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The myth of the mobile Industry is that successful Youth products need to be "fun", "cool" and "fashionable".
mobileYouth 2003 research highlights why these are only superficial factors, and the reasons behind usage are more fundamental, deep-rooted drivers.
The demand for Mobile Java Games will be cyclical relying on "one-hit wonders". Long term growth will come from the development of games that enable Youth to engage in peer group interaction and communication rather than being purely based on "fun" and "entertainment". Youth spending on Mobile Java Games will account for €322 million by 2006.
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The Youth consumer is conveniently homogenised into one group yet motivating factors for mobile product usage change significantly as they mature.
Often the mobile Industry conveniently homogenizes the Youth consumer into one big data using group, yet motivating factors for usage change significantly as they mature. This assumption coupled with viewing technology in isolation of other Youth products and services, often sees a mismatch between expected supply and demand.
ABOUT THE MOBILEYOUTH 2003 REPORT
mobileYouth 2003 provides in-depth statistical analysis on 20 of the leading markets worldwide: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Korea, Netherlands, Portugal, Singapore, Spain, Sweden, Taiwan, United Kingdom, and United States.
