When he needs to figure out what his company should be doing next, Daniel Kranzler often seeks expert advice--from his 18- year-old daughter. Kranzler's company, Mforma, makes games and ringtones for cell phones and, by staying plugged in to teens like Kat, has seen sales double every few months. He's not alone. An explosion is under way in the cell-phone business, as innovative new companies are popping up, feeding not just teen tastes but also, in the process, defining a new future for wireless communications. Kranzler inked a deal in December for Mforma with Marvel for exclusive access to its comic-book characters and is working on a next wave of cell-phone services. "My daughter lets me know what she thinks of the products--with a baseball bat," he says. "Her favorite is, 'Oh, Dad, you so don't get it.'"
Yes, in this vibrant little corner of the wireless industry, market research can be as simple as asking your children what they like. But that doesn't make the potential any less captivating. The cell-phone phenomenon reaches way beyond teenagers. There are 180 million cell-phone subscribers in the U.S. today, and we are no longer simply talking or text messaging or gaming. We are living inside our phones, even decorating them like a home, with images we call wallpaper. Meanwhile, creative companies big and small are scurrying to persuade us to use our tiny screens in ways we haven't even imagined. Fox thinks we will want to watch 24: Conspiracy, a version of its hit TV show developed just for the phone. The NBA hopes basketball fans will use their phones to get game stats, follow their fantasy leagues and watch replays. One ambitious start-up is betting that people will pay to blog via cell phone.
If all this sounds suspiciously like the hype-saturated Web circa 1999, it should. These days, tiny companies with names like Zingy and Jamdat are market leaders, and product testing often means throwing something new out to the public just to see if it flies. The world of these wireless data services is so unformed that no one knows yet what people will pay for in the long run. "The history of this space is everyone just feeling their way through," says John Burris, director of wireless data services for Sprint. But the excitement is real: companies and industry experts are convinced that cell-phone services hold great promise and are desperately trying to get into the game, hoping to catch the next wave in our growing Cell-Phone Nation.
For the moment, the market is being driven by teenagers, who have moved far beyond talking on their phones. "I text more than I talk," says Josh Blackburn, 19, of Naperville, Ill., who tries to keep his $70 monthly cell-phone bill under control by talking only after 7 p.m., when his minutes become free. But he will pay to send text messages to his friends, to IM them and to download wallpaper of Jessica Simpson. Royce Badger, 17, of Atlanta, loves his commute to school--that's when he plays racquetball on his cell phone. Erin Duffy, 17, a high school senior in Katy, Texas, lost the flashy phone that let her download ringtones and wallpaper, so, as punishment, her father saddled her with an older model that, to her mortification, allows her only to text and talk. She's saving up for a new one, with different ringtones for each of her friends: "I'll have Britney Spears for my girlfriends, and I'd have rap for my boyfriend."