Computers for 3-Year-Olds

Toy and PC makers are rolling out computers and digital tools for the youngest audience yet

by Olga Kharif

When Chiara Jannotta Rothenberg was just 18 months old, her parents started sitting her on their laps to watch photo slide shows on the home computer. By the time she was 2, Chiara was slowly punching keyboard buttons with her little fingers in Microsoft (MSFT) Word. "She wanted to learn what mommy was doing," explains her mother, Jacqueline. Now 4, Chiara plays interactive games on kids' Web sites, including Viacom's (VIA) Noggin.com. She is among a growing number of children using computers and other digital devices practically from the cradle—creating what toy and computer makers see as a new market opportunity.

While kid-friendly electronics—keyboards, software, and even laptops—are nothing new, most have been geared toward children ages 7 to 12, and many haven't done very well. In 2004, Disney (DIS) released a computer with Mickey Mouse ears for the under-12 crowd. But like many other early gadgets, it has come and gone. Perhaps, since many parents just let their school-age children use the "adult" computer, there wasn't much demand for a dedicated, specialized machine for children.

Mess-Proof Computing

Now, electronics makers are realizing that the real, untapped opportunity for hardware may lie in catering to an even younger crowd: 3- to 6-year-olds, whose undeveloped motor skills and messy habits (think grape-juice spills and cookie crumbs) prompt most parents to keep their offspring away from their computers, or only allow supervised use. Seeing their parents tinker daily at personal computers, many kids want PCs of their own for game-playing and exploring the Web.

And parents don't appear to be becoming any less uptight about handing over the keyboard to the family PC. According to surveys by consultancy NPD Group, an average child in the U.S. now starts using a computer at the age of 5½, only a slight decline from two years ago, when that average age hovered at 5.7 years old.

The question, then, is whether those parents might be more apt to buy a separate computer or device designed specifically for their little spillers. An array of companies, from toymakers LeapFrog Enterprises (LF), VTech, and Mattel (MAT), to computer maker Hewlett-Packard (HPQ), appear to think the answer is yes, and recent market research suggests they may be right.

Last year, 46% of consumers purchased a high-tech gadget for a child 3 to 5 years of age, the highest spending level on behalf of any children's age group, according to the survey by In-Stat. That's a huge shift from a few years ago, when the highest percentage of such spending went toward purchases for kids ages 5 to 10. In-Stat also estimates that the market for edutainment toys will more than triple from $2.1 billion last year to $7.3 billion in 2011. Toymakers are discovering that "if a toy has purported educational value, parents are more likely to buy it," says Stephanie Ethier, an analyst with In-Stat.

PC Kids

This fall, HP plans to sell its first desktop PCs designed for families with younger children. The devices will be bundled with JumpStart learning software and a special kid-friendly operating system that sits on top of Windows and filters inappropriate Web content. "We are taking our current product line and providing software that will help kids learn," explains Sean Patterson, senior product manager for consumer desktops at HP.