Apple Inc. (NASDAQ: AAPL) made headlines going into the back-to-school season last summer after research group Student Monitor published a study that showed that some 27% of college students who own a laptop were using one of Apple’s MacBooks or MacBook Airs. According to the study, Apple had finally displaced Dell (NASDAQ: DELL), whose affordable Microsoft (NASDAQ: MSFT) Windows-based line of laptops has controlled the college market for the better part of a decade. With Hewlett-Packard (NYSE: HPQ), Sony (NYSE: SNE), Gateway, Lenovo (Pink Sheets: LNVGY) and other manufacturers controlling less than half of the market, Apple’s future as the leading laptop manufacturer in the college market. And that’s not even counting the mounting popularity of the iPad.
Student Monitor also found that Apple’s new tablet was very popular among students. Going into the current school year, the research company found that 46% of students interested in buying an e-reader for school purposes were interested in purchasing an iPad, compared to just 38% who were interested in purchasing Amazon.com’s (NASDAQ: AMZN) Kindle. The survey should be promising to both Apple and tech investors alike, as it indicates that students aren’t necessarily put off by the high price of tablet PCs compared to devoted e-readers like Amazon’s device and Barnes & Noble’s (NYSE: BKN) Nook. Still, the tablet and e-reader sector of the college student market is still emerging, an uncrowded segment that could still bring challengers to Apple’s presumed throne. That is where start-up Kno and its textbook-focused tablet come in.
The Silicon Valley start-up that shares the name of its two tablet PCs aimed directly at college student is banking on the openness of the tablet market right now in addition to students’ willingness to pay high prices for technology. In June, Kno announced its first tablet, a 5.5 pound machine running on a proprietary, Linux-based operating system with two 14-inch touch screens built to accommodate textbooks designed by Pearson PLC (NYSE: PSO), Cengage Learning, John Wiley & Sons (NYSE: JWA) and McGraw-Hill (NYSE: MHP). The dual-screened Kno would retail for the hefty asking price of $899, perhaps too steep even for students who expressed interest in Apple’s $699 iPad. Yesterday, Kno announced the pricing for its second tablet, a single-screened model that will share its big brother’s functionality at a $599 price point. The smaller device, according to Kno CEO Osman Rashid, will be targeted at not just the college market but K-12 students as well. Both tablets are expected to launch next spring, a little too late to make the holiday rush or spring semester, but in plenty of time to begin a concerted marketing push towards the fall 2011 back-to-school push.
Kno stands a very good chance of making waves in the college computing market despite the high price of entry for its products. Provided they can raise awareness for the product in time, and provided the digital editions of the textbooks from its publishing partners are competitively priced, both Kno tablets should prove attractive alternatives to Amazon and Apple’s products. The lack of an interactive screen limits the Amazon Kindle’s appeal as a classroom device, not to mention its limited selection of textbooks while Apple’s iPad is also, at least in its current form, not well-suited to the multitasking offered by Kno. Amazon shareholders especially should be nervous over a successful Kno, as the online retailers lucrative textbook business could be eroded by the device’s success. It’s much too early to determine if Kno can capture the college tablet market in the way that Apple has seized the college laptop market, but the start-up is one to watch in 2011.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
