Two large Apple shareholders say it needs to research the impact of smartphones on kids

Two of Apple’s institutional shareholders, hedge fund Jana Partners and California State Teachers’ Retirement System (CalSTRS), are calling on the company to study the impact of smartphone use on child development. In an open letter, the two investors said that after reviewing research, they believe that Apple needs to give parents more resources and software tools to make sure their kids are using their devices “in an optimal manner.”

Together, Jana and CalSTRS hold a total of about $2 billion in Apple shares, which represents a tiny fraction of its current $898 billion market cap. The letter is noteworthy, however, because both investors are influential activist shareholders. Jana Partners managing director Barry Rosenstein pushed Whole Foods to put itself up for sale before the grocery chain’s acquisition by Amazon last year, while CalSTRS, which manages retirement benefits for public educators in California, is the second-largest public pension fund in the United States.

In a letter signed by Rosenstein and CalSTRS director of corporate governance Anne Sheehan, the two shareholders said they worked with child development experts to review studies that found links between the use of electronic devices and negative effects on concentration, emotional health, sleep and empathy. These include research by psychologist and San Diego State University professor Jean Twenge, the author of “iGen: Why Today’s Super-Connected Kids Are Growing Up Less Rebellious, More Tolerant, Less Happy-and Completely Unprepared for Adulthood-and What That Means for the Rest of Us,” that found American teens who spend three or more hours a day on electronic devices are more likely to have a risk factor for suicide than their peers who use them for less than an hour a day.

The letter also says arguing that parents bear ultimate responsibility for their kids’ device and social media use ultimately “misses the point,” because parents still need the support of tech companies.

“It is also no secret that social media sites and applications for which the iPhone and iPad are a primary gateway are usually designed to be as addictive and time-consuming as possible, as many of their original creators have publicly acknowledged,” Rosenstein and Sheehan wrote, adding even though an American Psychological Association study found 94% of parents try to manage their kids’ technology use, “it is both unrealistic and a poor long-term business strategy to ask parents to fight this battle alone.”

The two believe that current parental control features in software are ineffective because they force parents to take an “all or nothing approach” by only allowing them to prevent access to certain functions or features. Furthermore, they claim many apps designed to help parents monitor their kids’ tech consumption aren’t backed by strong research and don’t have the same impact as they would with Apple’s support.

Jana and CalSTRS proposed several steps Apple can take, including tasking one of their executives (or hiring a new one) to focus on the issue and deliver annual reports, similar to its Environmental Responsibility Reports, for more transparency; creating a committee of child development experts; supporting researchers by giving them access to Apple’s information resources; and adding new setup menus and other options to software so parents can tailor functionality to specific age groups.

“As one of the most innovative companies in the history of technology, Apple can play a defining role in signaling to the industry that paying special attention to the health and development of the next generation is both good business and the right thing to do,” wrote Rosenstein and Sheehan.

TechCrunch has contacted Apple for comment.