Back to School: Generation Wireless

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Here in Southern California, there's no mistaking when school is back in session. The beach suddenly becomes less crowded, already-clogged freeways turn into parking lots, and even the most crowded shopping malls can suddenly seem almost tranquil.

The other obvious tip-off? A barrage of back-to-school commercials from all the wireless service providers, hawking the latest cool phone or unlimited texting package. The weather may be cooling as the sun rotates away from the U.S., but things get hot real fast in the market for wireless products and services when kids head back to class.

Fall fast-forward
Check out any school campus -- including grade schools -- and you'll see how deeply wireless connectivity has pervaded our kids' world. It's now common to see even first- and second-graders carrying cell phones. The pervasiveness of wireless connectivity today has transformed back-to-school season into boom times for companies selling the latest, greatest wireless device or plan.

Since younger generations tend to drive adoption of new services, wireless carriers such as AT&T (NYSE: T  ) , Sprint Nextel (NYSE: S  ) , and Verizon Wireless -- a joint venture between Verizon Communications (NYSE: VZ  ) and Vodafone -- are writing big checks from their marketing budgets to court teens, tweens, and young adults (an oxymoron in my book). This time of year is crucial to capture momentum going into the holiday season, where gift-giving drives higher revenue and service providers sign up a larger portion of subscribers.

Wireless device manufactures also consider product launch schedules at this time of year critical, and this fall's no exception. Already, Nokia (NYSE: NOK  ) has made several huge product announcements in its wireless lineup. Many of the devices obviously target kids, with media capabilities and MP3 players almost standard across the board. Apple (Nasdaq: AAPL  ) also just lopped $200 off the price of its high-end iPhone, which just debuted in June.

This year's trends
Last year, thin was in, as ultra-slim mobile phones captured hearts and minds, thanks to Motorola's (NYSE: MOT  ) hit RAZR product. The year before that, it was cameraphones, capable of snapping candid photos and even capturing video. Back in my high school days, you were either a rich brat or cash-heavy drug dealer if you carried a numeric pager around, and that was the most amazing wireless gadget at the time. My, how things have changed.

So what's driving wireless this year? Here are a few of the major trends:

  • More media: Building off the excitement generated by integrating cameras into cell phones, consumers are now taking to other media capabilities -- mainly music, thanks to the success of Apple's iPod and iPhone. But using mobile devices for gaming remains popular, and mobile TV is now coming to a pocket near you. Verizon Wireless already has such a service up and running, and AT&T hopes to launch by the end of the year.
  • User-generated content: Apple's inclusion of Google's (Nasdaq: GOOG  ) YouTube video content site on the iPhone may push demand for user-generated media past the wireless tipping point. Students and adults alike are expressing a desire to access a diverse set of content across the web, including blogs and social networking sites.
  • Unlimited: Regional carriers such as Leap Wireless and MetroPCS have hit pay dirt by riding the unlimited trend -- offering unlimited minutes, texting, or instant messaging for a flat monthly fee. Consumers like the idea of paying a predictable amount of money for unlimited services, and the larger wireless carriers are starting to experiment with these options as well.

Coming to a playground near you
So whether you're looking to invest in the company building the next best thing, or you want to plunk down some savings to grab one yourself, this is the time of year to see what's coming. As competition heats up, and prices on gadgets and service drop, prepared to be tempted.


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