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Originally published Sunday, February 14, 2010 at 10:02 PM

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Latest Fisher-Price toy mimics iPad

For two years, Fisher-Price designers and engineers have been keeping tabs on Apple and attending technology events like the International...

Bloomberg News

NEW YORK — For two years, Fisher-Price designers and engineers have been keeping tabs on Apple and attending technology events like the International Consumer Electronics Show in Las Vegas.

The result is the iXL, an iPad-like device for 3- to 6-year-olds that combines a photo album, electronic-book reader, music player, notebook, art studio and game player. Fisher-Price, a unit of Mattel, is unveiling the $79.99 device at this week's Toy Fair in New York and to the public in July.

"Kids like to emulate what they see in the larger world and especially what they see older siblings or parents doing," Sean McGowan, a toy-industry analyst at Needham & Co. in New York, said in a telephone interview.

"It's very logical to say that kids see parents on iPods or BlackBerrys and they're going to want something like that," McGowan said.

Developing the iXL was Fisher-Price's biggest investment in its 2010 product line, according to Kevin Curran, general manager and senior vice president of Fisher-Price brands. The company is betting the product will help drive profit growth this year, he said.

Last year, Fisher-Price sales dropped 8 percent to $2.17 billion, while Mattel's total gross sales declined 8.5 percent to $5.93 billion as consumers cut back on discretionary spending.

Sales of the iXL will probably be small in the first year and may total $10 million to $25 million, said Gerrick Johnson, a toy-industry analyst at BMO Capital Markets in New York.

Fisher-Price hopes sales will hit at least that amount, Curran said.

The iXL uses more technology than other toys coming on the market this year because most manufacturers and customers favored less expensive products, such as board games, during the recession.

Fisher-Price has reduced costs since 2008, cutting jobs and shrinking travel budgets by half, Curran said, "so we could reinvest in innovation."

Apple unveiled the iPad, a tablet computer starting at $499, on Jan. 27. The device can display full Web pages, books and iPhone applications, and has a touch-screen keyboard.

With costs of hardware like memory and touch screens decreasing in recent years, Curran said, Fisher-Price was able to attach a sub-$100 price tag to the iXL, which he estimated would have run about $250 five years ago. " 'I guess this is the end of parent gadget envy,' " he recalled one focus group member saying.

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The iXL's $79.99-price tag may be one of the higher ticket items in the preschool learning aisle, said Jim Silver, an industry analyst and editor-in-chief of toy-information Web site www.TimetoPlayMag.com, based in New York. Parents tend to spend more on younger children and products with educational elements, he said.

"The key is that the parents see value," Silver said in a telephone interview.

The iXL will compete with products on the market including LeapFrog Enterprises Leapster Learning System, marketed to children from 4 to 8 years old. That generated sales of $179 million in 2008, according to a regulatory filing.

More high-tech toys may hit the market next year, according to Eric Levin, who left Mattel in 1999 to start his own toy company, Techno Source. This is because the lead time between when toy companies begin to develop product lines and when they actually hit retailers' shelves is around 18 to 24 months, Levin, based in New York, said in a telephone interview.

"It's a big bet that tech's coming back," he said.

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