The math is simple: Little people add up to big sales when you’re in the baby business.

It’s a market with little apparent downside. It’s perpetually self-renewing. It’s not directly impacted by age compression. And it carries none of the baggage of other toy categories. (What’s there to complain about a pastel-colored teddy bear?)

Demographically, there’s rarely been a better time to be in the baby biz. According to the National Center for Health Statistics, more than 4.3 million babies were born in the U.S. last year, continuing a trend of incremental increases in the country’s annual birth rate that began in 1997. Juvenile manufacturers and retailers are responding to this population boom with ever-widening assortments of baby products, including toys. And this year, despite the economy, people are buying.

Through May, the NPD Group of Port Washington, N.Y., recorded a 4 percent increase in sales of infant and preschool toys year to date over the same period of 2007, a year in which the category’s overall sales saw a slip of 5 percent.

The change points out that, while relatively stable, infant and preschool products aren’t entirely a sure thing. It can be just as fashion-conscious a category as any other in the children’s entertainment sphere. While some infant toys such as classic wooden stackers and blocks continue to reign supreme at retail, others— like black/white/red developmental toys—have waned over the past few years, despite the common perception that parents of newborns are avidly seeking playthings that will stimulate their baby’s development and get him or her off to a bright start.

Playthings spoke with several manufacturers and retailers in the infant play space to find out which baby toy trends are holding their own and how they go about targeting moms, dads, grandparents and other gift givers.

When it comes to selecting a baby gift, a first teddy bear or soft doll is a popular choice with gift givers. And because of that, baby plush is one category that continues to be strong, both by sticking to timeless themes and by adapting to changing tastes.

“With so many parents knowing the gender of their baby ahead of time, pastel pinks and blues are still very popular,” says Ticia Will, senior product manager at International Playthings, Parsippany, N.J.

Specialty retailer Imagine That Toys can attest to that phenomenon. According to owner Gwen Ottenberg, the Wichita, Kansas-based toy store recently brought in Shlumpies, Snugglers and Squeakers baby plush from Douglas, Keene, N.H. “We are selling more online than in our store, but typically the blue and pink are outselling the other colors,” she tells Playthings.

Others are noticing unique color combinations in baby plush in response to today’s more fashion-focused mothers. “In the past two years, we saw baby blue combined with chocolate brown,” says Christa Sinclair, senior director of toys and reading products for Emeryville, Calif.-based LeapFrog. “We are now seeing a lot more fruit colors combined with jewel tones—for instance, raspberry and melon with a small dark blue accent.”

Because many consumers are increasingly interested in purchasing more healthy choices for their families, plush that bodes well for the environment is also tops for baby. According to David Niggli, president of FAO Schwarz, the retailer’s New York store does quite well with a line of asthma-friendly, pastel-hued plush from East Windsor, N.J.-based Kids Preferred. For the upcoming holiday season, the retailer will be introducing Organic Patrick, a self-created collection of eco-friendly cotton plush in the likeness of a playful pup. “The organic trend is something we see lots of parents responding to,” says Niggli. Items from the collection will include a pull toy, a stacker, a plush puppy and an activity mat.

Perhaps one of the more noticeable trends in the baby toys market is plush integrated with electronics. Rick Schaub, vice president and general manager of the mom, infant and toddler group at Learning Curve Brands, Oak Brook, Ill., recognizes this phenomenon as “electronic features often communicate more value to the consumer.”

LeapFrog, too, hinges its electronic infant plush on child/toy interaction, which dates back a decade ago with the introduction of its Hug & Learn Baby Tad plush doll. “The child bonds with Tad as a young baby and parents witness how much their child is still engaged by Tad a year or more later,” explains Sinclair.

Other manufacturers are careful not to saturate the market with electronic plush before the category has had a chance to reach its full maturation. Says Louis Premselaar, president of Kids Preferred: “Once a category establishes itself, most manufacturers spend their time converting everything to this new category and forsaking all other designs. Electronics in infant toys are a good example. We are careful to avoid making everything electronic, as you run the risk of killing the category before it’s had a chance to evolve.”

While infant plush integrated with electronics is a fairly new phenomenon, developmental infant and toddler toys enhanced with lights and sounds have been capturing the attention of consumers for several years. And manufacturers continue to respond in kind with toys that offer babies lessons in music, counting, shape and color recognition, and languages.

Desiree Paquette, vice president of sales and marketing for Tiny Love, distributed by The Maya Group of Garden Grove, Calif., sees the value of this product development for enhancing the playtime experience. “As a baby is exposed to different sights, sounds and sensations, the sensory receptors transmit this information, which stimulates nerve activity in the relevant part of the brain, where it is interpreted. The lights and sounds in our toys are designed for this specific purpose,” she explains.

“Babies love cause and effect,” adds LeapFrog’s Sinclair. “Nothing delights them more than to be able to turn on a light switch and activate a piece of music made up of silly sound effects. This gives the baby a sense of accomplishment and control over his environment.” This summer, LeapFrog introduced the latest cause and effect toy under its Learn & Groove brand: the Learn & Groove First Words Radio, which lets babies hear up to 50 words in either English or Spanish after selecting pictures from a radio dial.

Other companies, though, continue to walk a fine line between inclusion and too much emphasis on electronics in infant toys. “Babies’ senses are undergoing crucial developments, and stimulation through electronic light and sound provides excellent exercise,” explains International Playthings’ Will. “However, a loud, blinking object that holds babies’ attention isn’t necessarily beneficial to anyone, including parents.” For instance, the company’s Grabby Elephant, a best seller at Imagine That Toys, combines plush with a vibrating mouse to engage a toddler—and no batteries are required.

Some retailers say first toys like these aren’t what their customers are looking for. Oompa Toys, a Madison, Wis.-based Internet portal devoted to infant and toddler playthings, carries no electronic toys whatsoever. Imagine That Toys, too, finds more success with classic toys like stackers and nesting buckets. “We are noticing a trend from both parents and grandparents that they want their kids to use their brains,” says Ottenberg, noting the popularity of pull toys like Melissa & Doug’s Frolicking Frog and the Quack and Flap Duck from International Playthings.

“In general, it’s more about parents looking for products that help their kids develop their motor skills,” concurs FAO’s Niggli.

With no shortage of activity mats and play gyms on the market, consumers can take their pick of models that provide a stationary spot for babies to flex their muscles—both physically and mentally. This year’s offerings incorporate activities with themes like monkeys, lions and even outer space to correlate more closely to trends within nursery décor.

“We look for playmats that offer a lot of different play patterns, those that adapt for the consumer and are environmentally friendly,” says Niggli. In addition to its private-label collection, FAO carries mats from Edushape and Mammas & Pappas.

But perhaps no name is more prevalent in this space than Tiny Love’s Gymini, which first came to market in 1993 when there was virtually no existing competition. Today, says Paquette, that number has increased ten-fold.

“To differentiate our products, we have created mats with take-along features,” she tells Playthings, emphasizing the growing demand for portable playthings. This year’s Gymini, the Gymini Monkey Island, features a take-along monkey that plays music and lights up even when the play gym is not in use. In addition, the Gymini Musical Kick and Discover features a take-along pad that can be attached to a crib or used on the floor for tummy time.

Another player in the activity gym/play mat space, International Playthings, recently licensed Taggies to create the Taggies Activity Quilt, which boasts activities and tags for tactile stimulation on one side and soft fleece on the reverse. “Moms and grandmas know and love the Taggies brand, so it’s a great way to stand out in a crowded market,” says Will.

What’s black and white and red — and all over? Developmental toys in that tri-hued color scheme. They were a hot item five or so years ago, as they provided high contrasts that newborn eyes could discern. But according to industry experts, this category of infant playthings has since dropped off the radar screen and isn’t nearly as prevalent as it was once was.

“We are seeing less black/white/red themes in toys,” say Denise and Alan Fields, authors of the Baby Bargains book series. “It seems to have been a fad and folks have moved on. Parents seem to prefer colors that are warmer than this stark motif,” they add.

Niggli says black/white/red toys haven’t been as strong a seller as they once were, mostly due to mixed research as to whether they are as effective as advertised, while Jason Oliver of Oompa says his site carries black and white blocks, but that they don’t sell as well as colored ones.

Ottenberg carries Sassy developmental toys, widely known for the black/white/red design, and yet none of the ones in her store incorporate this particular design. She does, however, carry the Begin Smart line of board books, which are “great for add-on sales” and satisfy those customers looking for the black/white/red color scheme. “After all, you can never have too many books,” Ottenberg adds.