Shunned by Adults, Smartwatch Companies Take Aim at Kids: Retail

Shunned by Adults, Smartwatch Companies Take Aim at Kids: Retail

Selina Wang
Bloomberg

July 14 (Bloomberg) -- With smartwatches drawing lukewarm interest from most consumers, some technology companies are trying a fresh approach: market them to kids.

LG Electronics Inc., VTech Holdings Ltd. and Filip Technologies Inc. have all developed high-tech watches for children, undaunted by the slow progress the industry has made in pitching the devices to adults. They’re betting that kids may be the ideal market for the gadgets, which can either keep tykes entertained or track their whereabouts. The watches can even teach a more old-fashioned skill: how to tell time.

While only about one in five grown-ups has interest in buying a smartwatch, kids’ models might be an easier sell, said Benjamin Arnold, an analyst at NPD Group Inc. They’re typically cheaper, for one. And versions that can track children have obvious appeal to parents, who live in fear of losing small kids at a park or shopping mall. At the same time, the technology has drawn criticism for adding yet another electronic distraction.

“It’s on their body -- it’s like they can’t get away from it,” said Tovah Klein, director of the Barnard College Center for Toddler Development. “It’s going to be much harder for parents to set boundaries and limits.”

VTech’s Kidizoom smartwatch, which goes on sale in the U.S. this month, is designed to entertain kids without being overwhelming. The $60 device doesn’t connect to Wi-Fi or cellular networks, and there’s only a limited number of applications. That puts it in a different category than devices from Samsung Electronics Co. or Apple Inc., which is said to be working on a smartwatch.

‘Wholesome Play’

The idea was to make something that’s easy for a child to use, especially for taking photos or videos, said William To, president of North America for Hong Kong-based VTech.

“This is purely designed for the child’s fun,” he said. “It’s educational, wholesome play.”

Other companies are focused more on the communication and location-tracking features than entertainment. LG is debuting a watch called the KizOn in its home country of South Korea this month. The device, aimed at preschool and grade-school kids, uses the global positioning system and Wi-Fi to pinpoint the wearer’s whereabouts. It’s slated to be unveiled in the U.S. and Europe later this year at an undetermined price.

“Children as well as the elderly are ideal customers for wearable technologies,” Jong-seok Park, head of LG’s Mobile Communications Co., said in a statement. “Wearables allow us to stay connected without the worry of losing a device or the inconvenience of having to carry a large item in a pocket.”

Preprogrammed Numbers

LG is targeting a market pioneered by Filip, a company that was founded in 2010 by Sten Kirkbak after he lost track of his son at the mall. Parents can program five contacts into the Filip watch, and an accompanying iOS or Android app on the parent’s phone can locate the child. Like the KizOn, which also can call preconfigured numbers, the device doesn’t give kids the full capabilities of a regular phone.
“If you look at the entire population -- the one group that is not connected today is kids,” said Jonathan Peachey, chief executive officer of New York-based Filip. “That’s crazy. Kids want to go out and explore, be with friends, and travel to and from school on their own without having to worry about how to reach their parents.”

Parents see a clear need for the Filip, while consumers are confused about the purpose of an adult smartwatch, Peachey said. “There are probably no parents who haven’t experienced losing track of their child,” he said.

Price Tag

The capabilities of the Filip come at a price, though. It costs $200, plus $10 per month for the service. That puts it in the same ballpark as a Samsung smartwatch, which can retail for $200 to $300. The Kidizoom, since it lacks a mobile connection, doesn’t have a recurring fee. Future generations of the VTech watch could add more features depending on demand, the company said.

Amy Stellitano, a 37-year-old nurse from New York, is one mom who doesn’t plan to buy an entertainment-based smartwatch. Her 16-year-old son has enough electronics as it is, she said.

“It’s just one more thing,” Stellitano said while shopping at a Best Buy Co. store. “When I grew up, we didn’t have all this stuff.”

A device focused on location tracking may have been appealing when her son was younger, though, she said. “Because you never know, especially in New York.”

As of last month, revenue from smartwatches has totaled less than $100 million since October 2013, though the market is expected to get larger this year, according to Port Washington, New York-based NPD.

The Pebble

The Pebble watch is one of the nascent industry’s highest- profile products, born out of the most successful project started out of the Kickstarter fundraising site. Still, it remains a niche product: a $150 to $249 device that people mostly use to see messages on their phones. Services and applications for adult smartwatches need to improve before the industry can gain momentum, Arnold said. Most people aren’t clear on why they would even need one.

“It’s a product that we don’t yet have a problem for,” Arnold said. “It’s hard for me as a consumer to justify spending $300 to $350 on a device that tells me what’s going on with my phone.”

New product developments may help make the technology more popular, he said. In that vein, Google Inc. unveiled new smartwatches at an event last month, working with device manufacturers such as Samsung and LG. Apple, the maker of the iPhone, also is exploring a smartwatch, people familiar with the plans have said. Trudy Muller, a spokeswoman for Apple, didn’t respond to a request for comment.

Future Acceptance

While a minority of total consumers is interested in a smartwatch, more enthusiasm is coming from younger people, according to an NPD study on wearable technology. Among 16- to 24-year-olds, 30 percent say they are interested in buying such a product, while 25 percent of 25- to 34-year-olds were.

That suggests there may be less resistance to smartwatches in the future, which will filter down to the kids’ market, Peachey said.

“The more smartwatches that exist, the more that kids will see their parents come home with them on their wrist,” he said. “And the more that kids will want them as well.”

The typical 8- to 18-year-old in the U.S. already spends more than seven hours a day using electronic devices, according to a Kaiser Family Foundation report.

For parents, the challenge is striking a balance between that insatiable appetite for technology and the need for kids to think on their own, said Deborah Linebarger, associate professor of education at the University of Iowa. A smartwatch that functions purely as a tracking device could be beneficial by giving parents peace of mind and encouraging kids to play outside, she said.

“I don’t feel like we have to constantly entertain children,” Linebarger said. “There’s a real benefit to kids spending time being bored and figuring things out.”