While its target demo gets set to toddle off to school, the long-legged electronic learning aids (ELA) category has barely touched ground in the past two years. Following a meteoric 77% sales increase in 2001, which left the burgeoning video game category’s 43% hike in the dust, ELAs have continued to gain momentum. While the toy industry as a whole grew by a mere half a percentage point in the first three quarters of 2002 over the same period in 2001, ELA sales increased by 20%.

Much of the credit for the category’s upswing has to go to LeapFrog Enterprises, a mid-tier company that rocketed into the public eye in 1999 when it unveiled LeapPad, an interactive reading system with interchangeable books and cartridges geared to four- to seven-year-olds. According to industry tracker NPDFunworld, LeapPad books topped toy charts for the second year in a row in 2002, while the LeapPad itself took the number-four spot, and My First LeapPad (for kids three and up) came in at number nine.

In Q3 2002, the company’s net sales had risen 62% to US$182.1 million over the same period in 2001, with many retailers devoting entire in-store centers to LeapFrog’s various systems and books. LeapFrog will continue to expand its product base in 2003, adding new licenses like Scholastic’s Clifford the Big Red Dog to its Imagination Desk line, a system that uses coloring to teach letters to the three-plus set.

‘Five years ago, education and learning were negative words in the toy business – people didn’t know how to fit them into play patterns,’ says Peter Van Raalte, Scholastic’s VP of consumer products. ‘Now there’s been a switch, and the whole area has been picking up steam – quite honestly because of LeapFrog.’ Scholastic is planning to ride the upswing by inking further ELA licensing deals and expanding the line of Scholastic-branded electronic products it develops with Toys ‘R’ Us, adding four new SKUs in 2003 and six in 2004.

When category pioneer VTech found its turnover dropping by as much as a third, it revamped its product line at a dizzying rate to compete with LeapFrog’s runaway success. ‘Eighty percent of our line was brand-new in 2002. It was really a relaunch of VTech,’ says Jeff Rogers, VP of marketing for the Wheeling, Illinois-based company. ‘It was sparked by a feeling that we could really dial up either the way we were delivering content or the form we were using.’ Last year, VTech focused on adding new technology like the Voyager Adventure system (which has a full-color touch screen and an LCD screen) and using 3-D technology for ELAs like Smarty’s Workshop, a workbench with a talking, moving character that helps kids complete projects. Rogers says VTech plans to continue expanding and will launch a new system for preschoolers this spring, as well as increasing its licensed portfolio.

Drawing on the 2002 success of Kasey the Kinderbot (the number-four ELA in year-to-date sales last November), preschool powerhouse Fisher-Price will roll out a new system for kids ages two and up this September. Learn Through Music (US$34.99) features a full-color scrolling touch screen and is the first product to incorporate all of Fisher-Price’s preschool licenses, including Sesame Street and Blue’s Clues. Meanwhile, the company expects 15-inch Kasey the Kinderbot and digital buddy Chip to continue to captivate kids in 2003, though no plans for line extensions were in place at press time. ‘[Kasey’s] format helps to go beyond the academic. He can do the hokey pokey, and kids are just amazed by that,’ says Kerry Matson, Fisher-Price’s marketing manager for learning toys. ‘He truly is their little buddy coming to life, and that’s what really draws the child into the learning experience.’

Unlike the VTech vPort and LeapFrog Mind Station Connector, which allow parents to download additional software for the systems, Fisher-Price will not be offering Internet expansion for its ELAs, citing increased hardware and software costs and studies finding that parents don’t want to be bothered.

Oregon Scientific also successfully rode the category’s meteoric rise, watching its ELA sales double in 2001 and again in 2002 as it introduced several new products, including the Hot Wheels Accelerator laptop. Executive VP Steve Jackson says the company’s renewed focus lies in a combination of increased sound and image quality in LCD screens and the power of first-rate licenses like Barbie.

In 2003, Oregon Scientific will launch new systems such as a workbook creator and a series of interactive books (including a dictionary and encyclopedia), some of which will be based on book publisher Flying Rhinoceros’ original character The Horned Avenger.