Wednesday, April 16, 2014
NEW YORK - Toddler-safe texting has arrived.
Spurred by burgeoning demand for kid-styled tablets, LeapFrog Enterprises and VTech Holdings revamped their tyke-targeted devices to add features that let 3-year-olds send short messages to Grandma and even watch online videos without stumbling across websites kids shouldn't see.
"Exposing our children to the Internet at an early age is incredibly valuable, but how do you do it safely?" John Barbour, chief executive officer of Emeryville, Calif.-based LeapFrog, said in an interview.
By tackling parents' fears about their kids going online, these toymakers are seeking to extend their dominance in a niche category of the booming tablet market that they created two years ago after releasing the first versions of LeapFrog's LeapPad and VTech's InnoTab.
With the added Web features in the recently released $150 LeapPad Ultra and $100 InnoTab 3s, they are also presenting more of an alternative to devices from Amazon.com, Samsung Electronics and Apple in the larger market for tablets that is projected by researcher IDC to increase 34 percent to 67 million units shipped this year.
LeapFrog and VTech faced little competition early on for tablets made specifically for children -- as opposed to parents handing over an iPad to their kids. The LeapPad became a runaway hit, and its success helped turn around the company's fortunes. The shares have more than doubled since the first version went on sale in July 2011.
That easy ride has ended and it's not because Mattel and Hasbro, the world's largest toymakers, have entered the market. Despite these devices being one of the few bright spots in the sluggish U.S. toy industry, they've stayed out, saying making tablets is too expensive and risky and will instead focus on creating branded content for mobile devices.
Meanwhile, Samsung announced a kid tablet Tuesday that will be released next month, and Amazon's recent television advertising features a parade of children. It's offering a monthly subscription service with unlimited kid content, more parental controls and marketing the 7-inch Kindle Fire at $174 as "the perfect family tablet."
There may be plenty of room to keep carving out this niche with more families now buying more than one tablet, IDC said.
Given that LeapFrog has established itself as a leader in kid tablets and has increasing support from retailers such as Walmart, the Ultra is projected to be one of the top-selling toys this holiday-shopping season, said Michael Swartz, an analyst with SunTrust Banks Inc. in Atlanta.