VTech's Kid-Friendly Tech Strategy

Can kids get excited about electronic storybooks once they've played Plants vs. Zombies on Mom's iPad? That's the dilemma facing Allan Wong, the co-founder and chief executive officer of VTech Holdings. The Hong Kong-based company is a world leader in electronic toys for toddlers and preteens, an industry threatened by the popularity of tablets and smartphones, which can run millions of games, educational programs, and other apps. Wong says that even Steve Jobs has limitations when it comes to the youngster market. "I have seen parents give their iPhones to their kids to keep them quiet," he says. "But would you buy an iPhone for your kids? Probably not. That's where we come in."

Wong's formula: Build cheaper, kid-oriented versions of adult gizmos. Children "love to have what their parents are using," he says. Last year the company introduced the V.Reader, which looks like Amazon.com's (AMZN) Kindle but can handle animation and music, and the MobiGo, a smartphone-like device with a touchscreen and a slide-out keyboard. This fall, the company will roll out the InnoTab, a kids' version of the iPad, with a tilt sensor, media player, calendar, address book, and apps for painting and drawing.