Verizon Creates a Smartphone Plan for Kids

Most parents struggle with deciding when to get their children a smartphone. It's an added cost, but it comes with the ability to keep track of your kids and get in touch at a moment's notice.

Children, of course, also represent a growth market for wireless providers. If they can get parents to pull the trigger sooner, that results in more revenue per family. That's important, since the overall market for smartphones has been largely stagnant.

The global market actually shrank slightly in each of the past two years, according to data from International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. IDC forecasts 3% annual growth in 2019 with a five-year projected growth rate of 2.5%.

That makes it essential for companies looking to find growth to open up a larger customer base. That appears to be what Verizon (NYSE: VZ) is attempting to do with its new Just Kids plan.

A person holds a smartphone

The smartphone market has largely been stagnant. Image source: Getty Images.

What is Verizon offering?

The wireless carrier's Just Kids offers parents a set of controls that allow them to keep track of their children, limit how much time they spend online using their phone, and set content filters. The plan comes with 5GB of 4G LTE data but does not charge overages when that has been exceeded. If a child on the plan goes over the limit, he or she has his data slowed to 2G.

Parents can also limit who their children can talk and text to with a list of up to 20 parent-defined contacts. Pricing for the plan depends on which Verizon option the parents have chosen for themselves, but it can be as low as only an additional $5 for the first child's line, assuming the family has at least three lines.

"At Verizon, we take pride in being a true partner to parents by providing them with products and services designed to meet their needs in an ever-evolving and often confusing technology landscape," said Verizon marketing vice president Angie Klein in a press release.

It's good for business

This is a clear case where what's good for business (getting parents to buy phones for their kids sooner) may also be what's good for the customer. Verizon isn't doing this to help parents. It's leveraging what parents want in order to lure them into signing up and bringing their children along.

That's not a bad thing. Just Kids' tools should bring parents added comfort with the idea of their child having a smartphone at an earlier age.

"With Just Kids, we're leading the way on growing up with tech, providing parents with plan options and features that give them the peace of mind they need for safe and responsible phone usage," Klein added.

Young kids don't need a smartphone. Most have very few, if any, business meetings or people who need to reach them to make important decisions. It is nice, however, for parents to be able to know where their kids are and contact them at a moment's notice. This offer from Verizon makes that a little easier, which may be enough for some parents to add a line for their children earlier than they might have otherwise.

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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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