Commentary

2 Apple Investors Call On It To Counter Teens' iPhone Addiction

The Apple iPhone is far and away the most popular mobile device among teens — too popular, in fact, according to two of the company’s investors who are calling on the company to study its “unintentional negative consequences.”

“In a letter to the smartphone maker dated Jan. 6, activist investor Jana Partners LLC and the California State Teachers’ Retirement System [CSTRS] urged Apple to create ways for parents to restrict children’s access to their mobile phones. They also want the company to study the effects of heavy usage on mental health,” reports Luke Kawa for Bloomberg.

According to the open letter posted to the website thinkdifferentlyaboutkids.com, “78% of teens check their phones at least hourly and 50% report feeling ‘addicted' to their phones. It would defy common sense to argue that this level of usage, by children whose brains are still developing, is not having at least some impact, or that the maker of such a powerful product has no role to play in helping parents to ensure it is being used optimally.  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.”

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Collectively, Jana and CSTRS own approximately $2 billion in value of shares of Apple. 

In partnership with several experts and citing a number of studies, they write: “We have reviewed the evidence and we believe there is a clear need for Apple to offer parents more choices and tools to help them ensure that young consumers are using your products in an optimal manner.  By doing so, we believe Apple would once again be playing a pioneering role, this time by setting an example about the obligations of technology companies to their youngest customers.”

Why focus on Apple (besides the fact that it’s “a company that prides itself on values like inclusiveness, quality education, environmental protection, and supplier responsibility”)?

Piper Jaffray's semiannual teen survey, which pulled in 6,100 teens across 44 states in the U.S. with an average age of 15.9 years this fall, found that 78% of teens surveyed own an iPhone, up 2% from the spring 2017 survey. And 82% of teens said their next smartphone will be an iPhone, the highest amount of interest ever noted in one of these surveys,” according to coverage in MacRumors

“The Apple push is a preamble to a new several-billion-dollar fund Jana is seeking to raise this year to target companies it believes can be better corporate citizens. It is the first instance of a big Wall Street activist seeking to profit from the kind of social-responsibility campaign typically associated with a small fringe of investors,” David Benoit reports for the Wall Street Journal.

“The Apple campaign would be unusual for an activist like Jana, which normally urges companies to make financial changes. But the investors believe that Apple’s highflying stock could be hurt in coming decades if it faces a backlash and that proactive moves could generate goodwill and keep consumers loyal to Apple brands,” Benoit continues.

It's not the device itself that's nefarious, of course. It’s what apps you use, and how you use them.

In the New York Times this morning, Natasha Singer writes about Sweatcoin, a free fitness app that got her walking out of her home on a recent frigid day to tally up enough points — “sweatcoins” they’re called — to earn a goody such as Fitbits, anti-gravity yoga classes and, yes, iPhones and Apple Watches.

The app has some bugs to work out — it evidently shortchanges users on how many steps they actually take — but its virtue is that more than virtue is its reward. Sweatcoin’s “first premise is that physical movement has economic value,” Anton Derlyatka, a Sweatcoin co-founder, tells Singer.

So, too, do the social media apps, of course — but it's nearly entirely to the benefit of Snapchat, Facebook, Instagram, Twitter and the brands that use them to reach a society incessantly addicted to mindless chatter, consensual as it may be.

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