Addiction to gadgets and social media platform has been ubiquitous among children and youth. Investors view this addiction as opportunity, while some the shareholder believe otherwise. They think the addiction among children would lower the market value in future.
Two shareholders of Apple Inc. raised concerns about children getting hooked to their devices. According to the Hedge fund JANA Partners LLC and the California State Teachers’ Retirement System (CalSTRS), getting hooked to iPhone impacts developing brains of children. This could, in long term, reduce the market value in the future, according to two stakeholders.
Apple said it had offered many controls in iPhones since 2008 to restrict data, content, and websites. It outlined parents could restrict any websites or app from the use of their children.
However, investors have overlooked the concern outlining that habit-forming platforms are breeding grounds for them. Due to habit-forming nature of websites such as Google, Facebook, and Apple, they could add nearly $630 billion in their market value in 2017. Investors outlined that they invest in things that are addictive, because they are favorable for profit generation.
The investing community has been instrumental in investing in tech companies that offer services that are addictive. However, there is a concern among investors that these tech companies could be center of attention of regulators as alcohol and gambling companies have been in the past.
Kim Forrest, vice president and senior portfolio manager at Fort Pitt Capital Group, opined that companies such as Facebook, Twitter, and Snap would be at risk if regulators decide to put restrictions on time spend on mobile devices.
Jordan Waldrep, manager of the USA Mutual Vice Fund, which invests in tobacco, alcohol, and gambling stocks, opined that putting a blame on Apple for addiction is similar to blaming manufacturers of cigarette packs instead of tobacco companies. He outlined that his company has not invested in Apple, but would consider investing in social media companies.