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posted: 11/16/2013 7:25 AM

Retailers see kid-friendly tablets as possible bright spot in a tough holiday season

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  • Kaylie Zaal, 5, left, and her little sister, Reagan, 2, play on an iPad at their home in Middletown, Md. Manufacturers are racing to tap into the market for kid-friendly tablets.

      Kaylie Zaal, 5, left, and her little sister, Reagan, 2, play on an iPad at their home in Middletown, Md. Manufacturers are racing to tap into the market for kid-friendly tablets.
    the Washington Post

 
The Washington Post

Alissa Zaal had high hopes when she bought her 3-year-old daughter her own tablet.

The toddler was not impressed.

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"She kept asking, 'Where are my games? Why can't I swipe with my finger? How do I take pictures?" recalled Zaal, who lives in Middletown, Md., and runs a blog called From-Mom-2-Mom. Within weeks, the kid-friendly VTech InnoTab had been tossed aside, and Zaal's daughter had gone back to using her parents' iPad.

Tablet manufacturers are looking for new ways to entice children who have become accustomed to their parents' smartphones, iPads and Kindles. New kid-friendly tablets come equipped with camcorders and Wi-Fi connections, even social-networking capabilities.

But growing competition and tepid consumer sentiment might make for a tough slog as manufacturers race to tap into what, until now, has been a small sliver of the $10.4 billion tablet market.

Mainstream tech brands are also increasingly joining the fray. Samsung became the latest entrant with the release of its Galaxy Tab 3 Kids on Sunday. But analysts say no obvious favorite has emerged.

"It's still an open field -- nobody has dominated it yet," said Sean McGowan, an analyst for Needham & Co. "LeapFrog has done a good job, but are there also a ton of kids playing with iPads. There is no runaway winner."

LeapFrog Enterprises, one of the leading makers of children's devices, has braced investors for a weak holiday season. Sales of the company's four tablets, which range in price from $80 to $150, have been slow in the run-up to the fourth quarter, and executives say a shorter-than-usual holiday shopping season is likely to lead to lower profits. For many retailers, sales in November and December can account for more than 20 percent of annual revenues.

"If you look across the board, retail is pretty tough at the moment," John Barbour, chief executive of LeapFrog, said this month.

Toy sales, which have been relatively flat, are expected to hold steady again this year. Overall holiday sales, meanwhile, are projected to rise an anemic 3.9 percent, to $602.1 billion, according to the National Retail Federation. The average consumer is expected to spend $738 this holiday season, 2 percent less than he did last year.

For companies such as Toys R Us, which has weathered nearly two years of dwindling profits, children's tablets -- some of which cost more than $200 -- might hold the key to a profitable holiday season. To lure young shoppers, the chain has created tablet-testing areas in each of its stores, allowing kids to try out nearly 30 devices, including the company's Tabeo e2.

"Tablets have been one of the hottest toys, and the trend keeps building," said Paul Winslow, vice president of merchandising for Toys R Us. "They have become a big presence in peoples' lives."

Parents say kid-friendly tablets, which often come equipped with games and parental controls, offer a lower-priced alternative to traditional tablets. But bright pink and purple gadgets can also be quickly outgrown.

Jessica McFadden, who runs the blog a Parent in Silver Spring, knows this firsthand. She bought a LeapFrog Explorer for her children four years ago.

"That tided them over for a little while," she said. "Once they grew out of it, we looked around for devices they could transition into."

Now her oldest children, ages 9 and 7, have their Kindles and share a family iPad. McFadden said she plans to buy her son a Kindle Fire for his 10th birthday next month.

"It's like taking baby steps," she said, adding that the WiFi-enabled Fire will mean a new considerations. "We are going to have to make sure he doesn't disappear into his room with his tablet for hours at a time."

Forty-percent of families with children younger than 8 own tablets, a fivefold increase from 2011, according to Common Sense Media, a San Francisco-based family advocacy organization. And as tablet ownership has risen, so has usage by young children. Among 2-year-olds, 38 percent have used mobile devices, up from 10 percent two years ago.

Tabletmakers say there is ample room for the market to grow. Just 7 percent of children have their own tablets, according to Common Sense Media.

"The numbers are just skyrocketing off the charts," said James Steyer, founder and chief executive of the organization. "It's not just the LeapPad guys anymore; it's Samsung and Microsoft and Apple. This is where the world is going."

Some companies have taken tablet mania to an extreme. Products such as iPotty, an actual children's toilet, come equipped with built-in tablet holders. Even classic toys such as Furby and remote-controlled cars can be synced to tablets and smartphones.

"The next thing you know, we're going to see high chairs with iPad holders and strollers with tablets," Steyer said. "This is a fundamental change in the nature of childhood."

That shift, experts say, comes with its own challenges. The American Academy of Pediatrics discourages any screen time for those younger than 2. Older children, the organization says, should be limited to less than two hours of daily TV, tablet and computer use.

Elaine Maag of Arlington, Va., who has long eschewed the use of television and computers, says she resisted buying a tablet for years.

But in August, she bought her 8-year-old son an iPad.

"Of course, I don't want him to spend hours and hours on computers and iPads and Xboxes," Maag said. "But at the same time, I want him to be able to speak the same language as his friends."

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