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Why Apple, Inc. and Google Want to Cater to Your Kids

The two biggest names in tech want your kids. Well, Apple (NASDAQ: AAPL  ) and Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) want them as customers at least.

The Information reports that Google is looking to revamp many of its most popular services in a kid-friendly way. That could include a version of YouTube that's safer for children, as well as asking an Android user's age during the setup process. All the while, parents would have the final say on what types of permissions their youngsters have access to, as required by law for sites that allow registered users under the age of 13.

Do kids Google differently?
This isn't the first time Google has researched how to tailor to kids. A few years ago, Google sponsored a study at the University of Maryland that attempted to figure out how children search for information, and how that differs from experienced adult Googlers.

Kids trying to find information for school or other interests can sometimes run into hurdles, and Google wanted to figure out how to make its search engine more accessible.

Why Google cares
Google's business relies on collecting as much user data as it possibly can, and to that end, it'd like to get a head start. The challenge is ensuring their safety in accordance with federal laws, since the Internet can be a scary place at times.

It also goes beyond the kids themselves. By offering stringent control mechanisms, Google can also appeal to parents and ideally increase their own usage of Google's services as well. Google wants to keep its services within the family.

Speaking of keeping it within the family
Apple is also making moves to increase the appeal of its products to families and kids. After paying out $32.5 million to settle a class action lawsuit related to in-app purchases made by children, Apple is emphasizing its new Family Sharing feature in iOS 8. Not only will Family Sharing make it easier to share purchased content, but there are also a lot of new parental controls for in-app purchases.

iOS 8 with Family Sharing. Source: Apple.

Kids are also an important reason the iPod lineup still exists, despite its declining financial significance. What the iPod lacks in current revenue, it makes up for in future potential.

iPod revenue and units have been steadily declining for years, and Apple has elongated the product cycles as a result. But over half of reported iPod units are typically iPod Touches, which -- importantly -- run iOS. There isn't a lot of data, but chances are that the age demographics are skewed toward younger users. The iPod Touch serves as a gateway product to iOS, hooking users early with purchased content that they will hopefully one day transfer to an iPhone.

With great profits come great responsibility
As companies look farther into the future, that growth will have to come from somewhere. At the same time, the current state of platform competition underscores how important it is to ensnare future customers as early as possible.

It's also true that the tech heavyweights bear a certain responsibility in ensuring kids are able to use their respective products and services safely and responsibly as technology's reach deepens within society. Just like my Uncle Ben used to tell me, "With great profits come great responsibility."

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early, in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

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  • Report this Comment On August 19, 2014, at 5:25 PM, mds wrote:

    You have avoided the biggest reason. It is what they are being given starting in middle school.

    Education IS NOT utilizing Android.

    This continues into HS and College. For some, medical school (as I know from my Dr. Daughter in law that graduated from NYU Medical school 2 years ago.

    It is the default BYOD in the workplace where the company is not already using it; and now with IBM will be the premier device in all areas of medicine, business and e-commerce.

    It a nutshell; you cannot educate on one platform and then throw it away when going to the workplace to learn something dated and inferior.

    Although certain apps are used by kids as young as 2; they are not looking at this as a baby toy.

    There is plenty of that on the market already; which gets used for a few months before they loose interest.

    AAPL and iOS is the recent past, current and future. This cannot be disputed with anything but distortion of reality.

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Evan Niu

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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