Thursday, April 07, 2011

Kno-t Again: Intel invests $20 million and takes over Kno's tablet designs

According to The Wall Street Journal's All Things D, Intel Capital and Advance Publications (parent company of Condé Nast) led a new investment round of $30 million in Kno, the Silicon Valley-based startup that planned to ship tablets for the educational market starting late last year. $20 million of the total is coming from Intel. Kno claims that none of the tablets were actually ever shipped to customers, but several hundred were manufactured for Kno by Foxconn. As part of the deal, Intel will acquire ownership of the designs for Kno's tablets and will license them to other manufacturers, so Kno is officially out of the hardware business.

Kno will continue to develop its tablet software and pursue eTextbook licensing deals, but will target existing tablet platforms such as Apple's iPad. It's a smart move by Kno, and probably the only viable option that it had. I wouldn't be surprised if some of the $30 million goes to buy out one or more of Kno's earlier investors who had come on board because they believed in the potential of their tablet.

I still have a hard time believing in Kno's long-term prospects: It can no longer take advantage of the unique capabilities that it had designed into its tablets (for example, the 15" dual touch/stylus displays) to differentiate its offerings, and it has to compete with a variety of eTextbook distributors and publishers, including Chegg, the company co-founded by Kno co-founder Osman Rashid.
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