Teens and even younger children have flocked to the iPhone, helping to bolster the bottom line for Apple and its investors. Now, two of those shareholders are questioning the societal impact of putting iPhones into children's hands, warning that a lack of controls leads to smartphone addiction and a potential public-health issue.
New York-based Jana Partners LLC and the California State Teachers' Retirement System, or CalSTRS, said Monday in open letter to Apple (AAPL) that the company must offer more choices and tools to help children fight addiction to its devices. The two investors together control $2 billion worth of Apple shares.
In the 10 years since Apple introduced the iPhone, the gadget has transformed both the company and American culture. Almost two-thirds of Apple's revenue now stems from iPhones, and investors and consumers eagerly look forward to each new iteration of the device. That includes many teens and younger children, with the investors noting in the letter to Apple that the average smartphone-owning American teenager received their first one at age 10.
"There is a developing consensus around the world including Silicon Valley that the potential long-term consequences of new technologies need to be factored in at the outset, and no company can outsource that responsibility," the letter said. "Apple can play a defining role in signaling to the industry that paying special attention to the health and development of the next generation is both good business and the right thing to do."
Among their proposals to Apple: establish an expert committee including child development specialists; offer Apple's vast information to researchers; and enhance mobile device software so that parents have more options to protect their children's health.
The letter cited various studies and surveys on how the heavy usage of smartphones and social media negatively affects children's mental and physical health. Examples include distractions by digital technologies in the classroom, a decreased ability of students to focus on educational tasks, and higher risks of suicide and depression.
"It is also no secret that social media sites and applications for which the iPhone and iPad are a primary gateway are usually designed to be as addictive and time-consuming as possible, as many of their original creators have publicly acknowledged," the investors noted.
While some would argue that it's the parents' responsibility to monitor and control children's smartphone usage, the investors said it is "both unrealistic and a poor long-term business strategy to ask parents to fight this battle alone."
The investors' call reflects growing concerns around the world about what the long-term impact will be of using mobile devices and social media, especially for those who start to use smartphones at an early age.
While tech companies have not acknowledged openly that their gadgets may be addictive, some Silicon Valley insiders have begun to speak to media about how gadgets, mobile applications and social media sites are designed to be addictive and to keep users' attention as long as possible.