Apple faces activist pressure over children’s iPhone use

Two Apple investors are pressuring the iPhone maker to address concerns over smartphone addiction and the mental health effects of phone use among children, in a rare example of activist investors zeroing in on a public health issue rather than financial matters.

Jana Partners and the California State Teachers’ Retirement System, a pension fund that holds more than $1.5bn of Apple shares, issued a letter to the company over the weekend outlining their concerns.
They say there could be “unintentional negative side effects” of smartphone use by children and teenagers, and call on Apple to research the issue and provide phone settings limiting children’s screen time and content.
In the letter, the contents of which were reported by the Wall Street Journal, the investors argue that mental health concerns could eventually lead to a regulatory backlash that would hurt Apple’s financial performance in the long run.
The two investors say they are working with academics including Jean Twenge, a psychology professor at San Diego State University, who coined the term “iGen” to refer to the new generation of smartphone-addicted children.
“It’s not an exaggeration to describe iGen as being on the brink of the worst mental-health crisis in decades,” wrote Ms Twenge in an article in The Atlantic last year. “Much of this deterioration can be traced to their phones.”

The holdings of Jana and Calstrs represent less than 1 per cent of Apple’s total shares — the company has an market capitalisation of $890bn — but they believe that the issue of smartphone addiction is one that could strike a chord with users and investors alike.

Apple recently bowed to concerns over traffic accidents caused by drivers texting, with an update that tries to block users from sending texts while on the road.
Other tech companies have recently started to acknowledge and address their youngest users. Facebook launched a messaging app last year for children as young as six, which includes heavy parental controls.
Apple and Calstrs did not immediately respond to a request for comment. Jana confirmed the letter.