NEW YORK (Monitoring Desk): Apple Inc investors are shrugging off concerns raised by two shareholders about kids getting hooked on iPhones, saying that for now a little addiction might not be a bad thing for profits.
Hedge fund JANA Partners LLC and the California State Teachers’ Retirement System (CalSTRS) pension fund said on Saturday that iPhone overuse could be hurting children’s developing brains, an issue that may harm the company’s long-term market value.
But some investors said the habit-forming nature of gadgets and social media are one reason why companies like Apple, Google parent Alphabet Inc and Facebook Inc added $630 billion to their market value in 2017.
“We invest in things that are addictive,” said Apple shareholder Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management.
He also owns stock in coffee retailer Starbucks Corp, casino operator MGM Resorts International and alcohol maker Constellation Brands Inc.
“Addictive things are very profitable,” Gerber said.
Still, the investment community is increasingly holding companies to higher social standards, and there is some concern that market-leading tech companies could draw attention from regulators much like alcohol, tobacco and gambling companies have in the past.
Alphabet and Facebook could not immediately be reached for comment on Monday. Facebook has said social media can be beneficial if used appropriately.
In a statement to Reuters, Apple said it has offered a range of controls on iPhones since 2008 that allow parents to restrict content, including apps, movies, websites, songs and books, as well as cellular data, password settings and other features.
“Effectively anything a child could download or access online can be easily blocked or restricted by a parent,” Apple said in the statement.
Apple shares fell marginally on Monday. CalSTRS holds $1.9 billion in Apple stock, a sliver of the company’s nearly $900 billion market value, while JANA declined to disclose the size of its smaller stake.
“Before Apple speaks, I think it’s too early to change the narrative” for investors, said Peter Jones, vice president of research for Ferguson Wellman Capital Management, which has about 350,000 Apple shares.
Social media companies, not hardware makers, are more deserving of any addiction-related scrutiny, some said.