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Thursday, Mar 28, 2024

Looney? Not Really

In a few short seconds, the ClickN Kids family tablet can go from teaching a child phonics with the help of the Looney Tunes gang to an adult device with a different interface ready for some tweeting by mom or dad. Those kinds of capabilities, especially for a tablet that costs just $99, has created a runaway hit for CNK Digital, the Woodland Hills company that developed it. The 7-inch device practically flew off the virtual shelves at Walmart.com, pulling in $10 million of sales last year after hitting the market in the fall. Within weeks of its launch, it had posted record-breaking sales for children’s electronics in multiple categories on the website. Armie Carabet, chief executive and co-founder of CNK, said he believes the tablet’s success is rooted in a strategy that has made the device’s educational aims paramount. “Most publishers inject fun and add in some educational pieces at the end. We start with education and put the fun around it,” he said. Since creating such a buzz, other national retailers such as Best Buy Co. Inc., Office Depot Inc., HSN Inc., the operator of the Home Shopping Network, and Toys “R” Us Inc. recently signed on to carry the tablets. “We’re going to have a much broader visibility this year than last year,” Carabet said. It’s been quite a development for a company founded just 11 years ago by Carabet and Alan Scalone making niche education software that competed against Pearson PLC and McGraw Hill Education, leaders in scholastic publishing. Gartner Inc., an information technology consultancy in Stamford, Conn., predicts that more than 57 million tablets will be sold in North America by the end of this year, up nearly 25 percent since last year. And the number is expected to grow to almost 72 million units next year, so there is a lot of market share to capture. But with the cost of manufacturing tablets becoming cheaper, that also means more competitors. One of the biggest players is Fuhu Inc., which sells tablets that cost $179 to $269. The El Segundo company introduced its first Nabi tablet in late 2011, and it has become such an overwhelming success that Forbes magazine named it the Most Promising Company in America earlier this year. Then there are Apple Inc. and Samsung Group, which rake in significant income from their tablet sales. Apple’s iPad Mini starts at $299 and Samsung’s Galaxy tablet for kids goes for about $229. “More parents have become tablet users and understand the benefit of tablet use for kids,” said Mikako Kitagawa, principal research analyst for Gartner. Looney marketing Prior to releasing the ClickN Kids tablet, CNK sold educational software in more than 100 countries to schools and home consumers. The ClickN Kids concept was rolled out in 2004 during the “No Child Left Behind” movement, and it featured tools for reading skills. ClickN Read Phonics was introduced two years later, but it wasn’t until 2011 that Looney Tunes characters were added to the mix. CNK has an exclusive partnership with Warner Bros. Entertainment Co. in Burbank to sell the program using its Looney Tunes characters as a marketing tool. Warner Bros. further cemented the partnership by giving CNK exclusive rights to make educational tablets featuring the characters. The 7-inch CNK family tablet is available in eight colors and comes with a matching gel case. Equipped with 8 gigabytes of memory, it also features a webcam and has Wi-Fi capability. To keep costs down, CNK used a lower-end processor from Intel Corp. It features a 1.5 GHz dual-core processor, which processes data slower than the 1.3 GHz Tegra 3 quad-core processor found in the Nabi 2. Carabet brought the tablet from concept to retail in less than five months. Walmart was involved with the decision to add multiple colors, and the retail chain thought the product was marketable with its relatively low price point. “We’re not trying to be the cheapest on the block, but we can compete on a happy middle ground,” Carabet said. “It was very affordable to the masses. The Walmart customer is typically a value-conscious customer.” Angel Morales, a managing director at youth marketing agency C3International in Overland Park, Kan. said that other national retailers picking up CNK’s tablet is a testament to its success. “It’s very difficult, and the cost to get your product in any retailer is pretty high,” he said. Not only is the tablet loaded with the Looney Tunes program, but there are a total of 30 pre-loaded applications, including games and training on subjects such as history and math. The curriculum was developed by early education research professor J. Ron Nelson, who serves as director of curriculum development for ClickN Kids. Nelson specializes in behavioral and learning disorders of children at the University of Nebraska. And though the tablet’s core demographic is pre-K to fifth grade, Carabet said a key decision was to add on simple software that switches the platform from a “Kids” tab to the “Grown Ups” tab by entering a secure PIN. Beyond the convenience of sharing the product, parents can protect their kids by setting parental controls, including web content filtering and built-in monitoring. “Parents are more involved than ever with their children’s educations, and we want to be known as that company who is empowering parents and inspiring kids,” he said. Expansion plans Tablets can be highly profitable. Fuhu brings in about $175 million annually, but it is unclear how CNK stacks up against those figures. CNK would not disclose revenue, but the company currently employs 20 people, which is up about 20 percent since last year. Now, it plans to further its product mix by adding more languages to its software and tablets. For instance, to break into Walmart’s Puerto Rican market, the company must first add a Spanish piece to ClickN Kids. CNK Digital is also working on a higher-priced bundle for $129 that includes handwriting software and a set of headphones. This will likely be available when the tablets make their expansion in September and become available on at least four other national retailers’ websites, as well as on the Home Shopping Network.

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