The iPad Is No Match For This Tablet

Robert is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

For the long term investor, it's primarily business performance rather than recent stock performance that determines their course of investment action. Very helpful in determining current as well as projected future potential in a business is developing an understanding of the business' products or services. Now, while there is no disputing the marvels of the latest iPad, an Android fan's Asus Transformer Prime or various other tablet offerings, there's also no disputing that none of them today actually compete in any meaningful way with the LeapPads 1&2. Apple (NASDAQ: AAPL) has built a very loyal, cult-like following and as cults are wont to do it is widely believed within that if some kid's tablet can do it, the almighty tablet they've put all their faith in can certainly do it as well, and most likely even better. I could best describe this belief as being entirely incorrect.

Even in the carefully sanitized, organized, and most of all specialized world of the iPad, chaos still rules the day where children's educational programs are concerned. In our school system we as a society generally accept that for anyone to share responsibility in the education of our children, they need to achieve certain degrees of education and more specifically, specialized training in the actual field of education. LeapFrog's (NYSE: LF) LeapPads 1&2 offer just that throughout all of their children's programming. John Barbour, CEO of LeapFrog Enterprises describes their flagship products as "educationally fortified entertainment" for kids and that's not an overly ambitious marketing catch phrase; it's a carefully constructed and deliberate statement of irrefutable fact.

Certainly, folks that are inclined, can hand off their $500-$800 tablet to a 4-9 year old and hope they spend their time on it learning and that they don't drop it and in one quick moment render it a $500-$800 paper weight, but even if they do, their children will not be learning nearly as productively as those playing with a much cheaper $100 product designed specifically by educators and scholars themselves. It is clearly with great pride that John Barbour speaks of his company's product and the process whereby they have produced an educational toy that captures children's imaginations and makes education fun on a platform that parents can trust that from the moment their children fire it up, they will be learning, and more specifically learning through a platform designed by a company that has employed and tasked professional educators for over 17 years now with the development of such products.

There will always be folks willing to settle for a hodge podge of programs they can drum up on other tablets, but they will never be sure of the credentials of those creating those products and it would certainly be more difficult to determine what their children are learning when they are even actually engaged in any sort of educational tablet games. There is no denying this option will keep many from opting for the optimum learning experience for their child, particularly as they already own another tablet.  While I won't argue that it's necessary that a child be doing grade 1 curriculum before they even enter the school system, there's a large segment of the population that is coming to see the wisdom of setting their young children up for success early on in school as they realize the value of instilling a positive attitude towards learning and the confidence that early success will breed in their children.

In the U.K., early learning for kids and responsible game play are taken seriously; the LeapPad2 was the number one selling tablet and number one selling toy as of Dec 10. Hopefully, there's enough competitive juice in America to keep driving growing sales domestically as well rather than having all of their children working for better educated Brits a generation from now. I kid,...kind of. 

Key Distinctions

  • Designed with kids in mind, John Barbour has delightfully bragged that he can bounce a LeapPad off a wall and it would be none the worse for wear.
  • At $100 for the LeapPad2 and as little as $76 for the original LeapPad it comes at a fraction of the cost of a major multi-purpose tablet.
  • Nowhere for children to go within the tablet's ecosystem other than educational activities so parents need only supply the cartridges or downloads.
  • LeapPads plug into your P.C. so that you can upload all of the data from your child's activities to a dashboard known as LeapPad Connect and evaluate their progress based on scores on large numbers of questions they answer or tasks they achieve within each of the games they play over tracked periods of time on each title.
  • Upon receiving the scores, parents are informed as to the grade level of achievement their child has attained at any given point in time on each subject
  • Based on a child's progress LeapPad Connect will recommend the next best 'purchase' for furthering their child's education.

What I've essentially described is a schooling curriculum, not just a game system for kids. In reality, fitting the tablet with a robust curriculum, even for a pre-school child will ideally require parents to spend another $200-$300 over the course of a year to keep their child fully engaged and well rounded in terms of education. Subjects such as reading, drawing, writing, math, geography, science and problem solving most often come as separate games/programs. As a parent of a 4 year old, I personally opted to max out my little guy's curriculum as I find the variety keeps him engaged during all the time I allow him on his LeapPad.

Considering the cost of daycare or pre-school, as a consumer I still find the whole idea of spending a mere $400 over the course of a year to have my child comfortably engaging in grade one educational activity before he even hits kindergarten a screaming bargain! More importantly for the investor looking for a reason for these little tablets and an investment in LeapFrog to succeed in the face of competition from the likes of the iPad, the answer lies with parents around the world who will opt to purchase so many high margin downloads or cartridges on top of their LeapPad purchases in the coming year with these many distinctions in mind.

Robert Kralj has  positions in LeapFrog Enterprises. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple and LeapFrog Enterprises. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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