Toy-makers jump on iPod fad

Firms are building products around the music makers

By Anne D'Innocenzio

Associated Press, February 15, 2005

NEW YORK - After bemoaning the emergence of the iPod as children's latest must-have toy, toy-makers are now looking at the digital musical player as their own marketing strategy.

After the success last year of Zizzle Inc.'s iZ and Hasbro Inc.'s I-Dog, both of which can be hooked up to Apple Computer Inc.'s iPod, competitors are coming up with their own iPod-friendly products, aimed at preteens. The toys, being shown at this week's American International Toy Fair trade expo, range from electronic drumsticks and other musical instruments to chairs and electronic playmates that act as speakers.

For even younger children, Baby Einstein Co. has a rocking chair that connects to an iPod so parents can sing along while the child rocks. And Emerson Radio Corp. has a SpongeBob SquarePants speaker system that plugs into an iPod, part of its line of electronics sold under the Nickelodeon brand.

"The iPod is the No. 1 toy. My view is why fight them? Why not join them?" said Isaac Larian, chief executive officer of MGA Entertainment Inc., which has a chair under its popular Bratz brand that serves as an iPod speaker.

Apple has sold more than 42 million iPods, 30 million in 2005, making the gadget a huge marketing opportunity for companies in a range of industries. Merchandise including iPod clothing, leather cases, speakers, massage chairs were part of an estimated $850 million cottage industry last year, according to NPD Group Inc., a market-research firm in Port Washington, N.Y.

The toy industry is looking to the iPod to help reverse a decline in traditional toy sales that dates back to 2003. Sales of toys dropped 3.6 percent last year to $21.3 billion from $22.1 billion in 2004, despite the industry's efforts to come out with more electronic toys, according to NPD figures.

In fact, according to the report, sales of children's electronics and other communication gadgets fell 8 percent last year, a sign that children want the real thing, according to Anita Frazier, a toy analyst at NPD.

Still, analysts say that merely linking a toy to the hugely popular digital music player does not guarantee success.

"It makes sense to pick up on the iPod trend. It follows the overall trend that kids want adult things," said Stephanie Oppenheim, cofounder of toyportfolio. com, an independent guide to toys and other media. But she added, "You have to look at the underlying play value and the quality of the toy. I don't think all of the accessories will be created equally."

Oppenheim questions the sound quality of some of the toys that serve as speakers for iPods, for example.

She had praise for Hasbro's new accessories for its I-Dog, such as miniature purses that hold the pet. She also praised I-Dog's more interactive version, I-Cat, which allows the user to create meows, purrs, and scratching sound effects to the iPod tunes by simply petting it.

Some toy executives, acknowledging a plethora of toys linked to the iPod, said they made sure they carefully chose their offerings, which are generally in the $20 to $40 range.

MGA's Larian said his company pared its list of 20 different iPod-linked toys to six. Besides the Bratz chair, MGA is coming out with palm-size Petz - a rabbit, pig, frog, and cat - that can be hooked to an iPod and respond to the music by moving and lighting up.

Blue Box, known for military toys and preschool products, is branching out with a line of sleek white electronic musical instruments that allow users to jam to iPod tunes. The collection includes a stage mike, drumsticks and guitar.

Cliff Seto, president of Blue Box's U.S. division, noted that the company made sure that the instruments worked with the iPod to further personalize the tunes, and were not just "gratuitous."

Spin Master Ltd. considered more than a dozen iPod-friendly toys, but decided to market just two for 2006. The toys - iDrum and iMix - serve as protective plastic cases for the iPod and are also tools to enhance the tunes. The iDrum, which features a drum pad on the back of the case, allows a child to create beats and rhythms, while iMix lets the children create scratching DJ sounds over the music.

"Toy companies can't compete against computer electronic companies. We have to stay true to ourselves," said Harold Chizick, vice president of global marketing for Spin Master.

"We have to bring products that are relevant to the trend."