Back to School: Is the Pen Mightier Than the Laptop?

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When I was a kid -- and it was a long time ago, trust me -- September was a time to purchase notebooks, pens, pencils, and organizers in preparation for the return to school. That was back when we all walked uphill, both ways, in knee-deep snow, just to get to class. But over the years, those traditional items have been giving way to laptops, USB drives, Palm Pilots, and cell phones.

It's not just college kids, either. More frequently, the trend is filtering down to grade school. Even my 10-year-old insists that he needs a cell phone. Do you want to know why? "'Cause everyone has them, and my backpack had a pocket for one."

Having elementary-aged schoolchildren geared up with all of these gadgets raises some interesting questions. But since we analyze markets, I'll leave the benefits and pitfalls to the sociologists. What I'm interested in today is which companies will benefit from the growing trend of must-have back-to-school electronics.

Now, I'm not a fan of sending my youngsters back to school with backpacks full of wires and batteries, yet I fill those packs up anyway with the latest electronic technology, including Apple (Nasdaq: AAPL  ) iPods and Dell (Nasdaq: DELL  ) laptops. And with all the talk about how heavy book bags are causing students to suffer from back pain, many companies are rolling out innovative designs that provide additional back support. Nike (NYSE: NKE  ) , for example, boasts higher-end models with neck and lumbar back supports, and some of them retail for more than $100.

Obviously, companies that offer unique gadgets to help make school life easier for students will benefit around this time of year. And many retailers have gotten pretty savvy with their marketing techniques. For example, Staples (Nasdaq: SPLS  ) runs $0.01 sales for items such as folders, pens, pencils, and erasers. And Target (NYSE: TGT  ) has begun a similar promotion. The companies figure that once parents are lured into the store to get some good deals on the old-school school supplies, their kids will most likely discover some type of must-have gadget on the shelves. And what parent is going to refuse to buy his or her budding scholar an educational item?

I know my kid would probably lose his head if it weren't attached to his shoulders, so who knows how long a Palm Pilot might last him. Still, I guess times are changing, and I'll admit that the technology is helping our kids learn at a faster rate. Just look at what LeapFrog (NYSE: LF  ) has done to ensure that young children get a head start in the learning process.

There is indeed a lot of technology out there revolutionizing the way students learn. And the newest products out there are constantly changing. So investors need to keep a close eye on what the kids are stuffing into their backpacks, and which retailers are offering the most attractive incentives.


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