Exclusive: Kno Student Tablet Start-Up in Talks to Sell Off Tablet Part of Its Business
Kno-the much-funded and high-profile Silicon Valley start-up aimed at making tablet computers focused at students-is considering selling off the entire hardware part of the business and is in talks …
Context & Ripple Effects
Kno spent late 2010 positioning itself as the most ambitious entrant in education hardware: a $46 million raise in September to build what its founders called the most powerful tablet anyone had made, followed by November pricing at $599 and $899 for a limited first run aimed at students carrying digitized textbooks.
This BoomTown report marks the reversal point: less than three months after those prices went public, the startup is in talks — still unconfirmed — to sell off the entire hardware operation and keep the software side. The story traveled fast enough that Engadget picked it up the same day, reading the move as a retreat from devices toward a software-only strategy.
First-order effects
- Kno's backers would see their $46 million-plus bet redirected from capital-intensive manufacturing to software, while any prospective buyer inherits the cost structure of producing a large-format tablet at consumer prices.
- Students and campus buyers weighing the $599/$899 devices face ownership uncertainty over a product line the company itself may no longer control.
Second-order effects
- If Kno exits hardware, the education-tablet slot it vacated opens for incumbents' devices — Apple's iPad above all — forcing textbook publishers to route their digital catalogs through platforms they do not own.
- Contract manufacturers and component suppliers counting on Kno's distinctive dual-panel design lose a flagship customer, reinforcing how hard it is for a venture-funded startup to sustain bespoke hardware volumes.
Third-order effects
- The episode fits a broader sorting in the post-iPad market: single-purpose tablet startups separating their software ambitions from hardware economics, because competing on devices requires scale few startups can fund through successive raises.
- Education technology consolidating around a software-and-content layer atop commodity devices would leave device ownership with a handful of platform companies — a structural outcome Kno's talks, if they conclude in a sale, would help confirm.
The trend: Venture-funded education tablet makers are splitting apart, shedding hardware to survive as software companies once Apple reset the economics of the device layer.