Kno Tablet Aims For College Market

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 Apples
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, Apples future as the leading laptop manufacturer in the college market.
And thats not even counting the mounting popularity of the iPad. Student Monitor
also found that Apples 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.coms (NASDAQ: AMZN ) Kindle. The survey should be promising to both Apple
and tech investors alike, as it indicates that students arent necessarily put
off by the high price of tablet PCs compared to devoted e-readers like Amazons
device and Barnes & Nobles (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 Apples 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 Apples $699 iPad. Yesterday, Kno announced the pricing for its
second tablet, a single-screened model that will share its big brothers
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 Apples products. The lack of an
interactive screen limits the Amazon Kindles appeal as a classroom device, not
to mention its limited selection of textbooks while Apples 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 devices
success. Its 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.