LeapFrog Enterprises (UNKNOWN:LF.DL) beefed up its kid-friendly tablet for this crucial holiday shopping season, but the pioneer of electronic learning toys still finds itself in a battle against some unlikely tech giants.
LeapFrog's been battling Vtech for years, but this time around its biggest rivals vying for space in Santa's bag may be Amazon.com (NASDAQ:AMZN), Samsung, and, to a lesser extent, Apple (NASDAQ:AAPL).
Amazon's been slashing prices on its entry-level Kindle Fire tablet over the past year, and this week it announced that it was making its kid-geared Kindle FreeTime service even more magnetic. The update allows parents to set educational goals for their children using any Kindle Fire tablet. Kids can't move on to apps or videos until the tasks are met.
Parents paying at least $2.99 a month for FreeTime Unlimited will also now have access to thousands of new learning books, apps, games, and videos.
LeapFrog should've had a chance with its LeapPad Ultra. It raised the bar on its Ultra line, coming closer to a true tablet experience assisted by hundreds of educational games and apps. Now Amazon is closing the gap in parental controls and content with a real tablet that actually costs less than LeapFrog's $150 price tag for the Ultra.
Samsung threw its hat into this niche last month when it introduced Galaxy Tab 3 Kids. Taking its popular 7-inch tablet and wrapping it in a rugged exterior for $30 more was just the beginning. Samsung's $230 device offers parental controls, a restricted app store, and a simple interface.
There's also Apple. When it introduced the iPad mini with Retina Display, it decided to continue to market its original petite tablet at a lower $299 price tag. That may not be in the same price range as Kindle Fire, LeapPad Ultra, and Galaxy Tab 3 Kids, but it's hard to escape the allure of the Apple brand.
All of this adds up to what will continue to be a challenging quarter for LeapFrog. The stock took a hit last month when it posted disappointing growth with guidance implying that sales during the holiday quarter will fall. Amazon making its kid-targeting platform that much more attractive is only going to make things harder for LeapFrog.