Electronic Gadgets May Dominate New York Toy Fair

Preschoolers will be able to access the Internet safely, while older children might have more fun learning to play guitar, thanks to new toys due to be unveiled next week at one of the world's biggest toy fairs.

As an estimated 14,000 buyers from 7,000 retailers descend on the annual American International Toy Fair in New York over the next week, they could be forgiven for thinking they walked into the Consumer Electronics Show by mistake.

For this may be the year when electronic toys, already an important segment, become a much more dominant force.

After years of watching children abandon their toys at earlier ages for MP3 players, cell phones and video games, toy makers should still be able to eke out some sales growth this year after deftly managing to combine elements of traditional toy play with electronics, industry experts said.

U.S. toy sales in 2006 crept up to $22.3 billion from $22.2 billion, driven by 22 percent growth in the youth electronics category, market research firm NPD Group said this week.

"One of the big trends continues to be electronics and especially music," independent toy industry consultant Christopher Byrne said. "You're looking at kids who want to be involved in music. They want to be rock stars."

Byrne said the success of Walt Disney Co.'s (DIS) pop music acts "Cheetah Girls" and "Hannah Montana" bodes well for Mattel Inc.'s (MAT) "I Can Play Guitar System," which teaches children to play guitar by matching colored images shown on a TV screen.

Zizzle LLC is introducing a guitar of its own as part of the "Electric Rockerz" music maker, which it said allows youngsters to create music as part of its electronic toy line inspired by Disney's "High School Musical" — a made-for-TV movie and franchise that has aired on 26 Disney Channels worldwide, reaching more than 100 countries.

Meanwhile, Mattel's Fisher Price line has made a way for preschoolers to go online with its "Easy Link Internet Launchpad."

After connecting the pad to a computer, children can plug figures of characters like Elmo or Barney into the pad, and visit a corresponding Web site where they can play games.

The device requires no typing and does not allow children to surf the Internet, the company said.

"You have to be on trend, and it has to be fun for the child," Neil Friedman, president of Mattel Brands, said in an interview.

It "gives the child a safe haven," Friedman said. "Moms like to let their children go on the computer, but are very leery of them going on the Internet by themselves."

Companies are also looking to capitalize on the popularity of cell phones and Apple Inc.'s (AAPL) iPod, said Reyne Rice, a toy trends specialist at the Toy Industry Association.

Lego is introducing a "Tetris-like" cell phone game, while Time Warner Inc.'s (TWX) Cartoon Network has packaged mini-episodes of popular cartoons that can be downloaded onto a cell phone or an iPod, according to Rice.

Tetris is a puzzle game popularized on Nintendo's first game console, where players have to stack falling blocks.

"It's the trickle-down effect," Rice said "from the adult market of anytime, anywhere entertainment."