Livescribe Acquired for $15 Million-End of the SmartPen Era?

Back in 2007, Livescribe introduced a product that bridged the analog and digital worlds-you use a physical pen and real paper, but everything you do is digitized and stored to be searchable and categorized. It was awesome, and just got better-in 2014 Dan reviewed the Livescribe 3, which I continue to love.

But today it was announced that Livescribe is being acquired, and I have to wonder if the age of the smartpen has passed?

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If you missed the news – the stylus is making a comeback, this time with the Microsoft Surface and Apple iPad Pro sporting digitizing styli that are pressure sensitive and work with the expansive and high resolution screens of the new devices. These are a far cry from what you used on your iPAQ or Palm III back a dozen years ago or so. So what does this have to do with Livescribe?

First, here is (most of) the text of the announcement:

“This acquisition provides clear benefits to both parties. It will enable Anoto to broaden its product portfolio, extend its business into the consumer market and retail distribution, and add a best-in-class digital note-taking solution to its other key solution areas, including creative solutions, collaborative solutions, and document processing and management. It will help Livescribe innovate faster, address new market opportunities beyond note-taking and the consumer segment, and continue to design, develop, and distribute next generation smartpen products.”

 

“Acquiring Livescribe is another important step in consolidating the Anoto ecosystem and realizing synergies in hardware and software development, supply chain and operations, and sales distribution.” said Stein Revelsby, CEO of Anoto. “We are already working on a new range of products to be launched in Livescribe’s sales channels in 2016.”

 

“Based in Oakland, California and founded in 2007, Livescribe’s smartpens allow students, business people, journalists, and anyone who values pen and paper note-taking to capture, access, and share everything they write, draw, and hear. With products geared toward both desktop and mobile users, Livescribe brings smartpen technology to business, consumers, and creatives wherever and however they work.”

 

“By joining forces with Anoto, we see huge potential for smartpen technology to expand beyond the consumer market and beyond writing and drawing on paper,” said Gilles Bouchard, CEO of Livescribe. “We’ve had a successful licensing partnership with Anoto since Livescribe was founded and I am confident that becoming part of Anoto Group will strengthen Livescribe’s position in the consumer market and allow us to pursue many exciting new opportunities in the years to come.”

 

“As part of this agreement, Anoto is acquiring Livescribe’s entire business operations, technology, and intellectual property. The Livescribe brand and existing infrastructure will be retained, with a goal of strengthening the position of both companies through the development and sale of new products.”

If this “provides clear benefits to both parties”, then it should be clear what those benefits are. However, based on a more detailed analysis at TechCrunch, it seems that the benefit for Livescribe is closer to ‘continued existence’.

Livescribe is being bought for $15 million, which is exactly their estimated 2015 sales. As Carly pointed out to me, this means that the people buying them see no upside or growth in the current brand. They also note that Livescribe has raised at least $68 million in capital since 2007, and even assuming $15 million a year in sales that would be <$150 million minus staffing and infrastructure costs – in other words, it is not likely that investors saw a huge payback on their investment.

As I mentioned, Dan and I have both been users of Livescribe since the early days and continue to be fans of the product. Joel has also been a fan of them. At my day job, I knew one person who used the original but never got another one and had stopped using it by 2010. Aside from that, I just don’t see them around.

Perhaps most telling of all, we bought one for my nephew to use in college in 2009, but he never integrated it into his life because he is part of that generation who is happy using a phone and laptop and rarely touching paper. My son went to college recently and had no interest in a Livescribe – he will type most things and have a notebook/journal for others.

And I think that is why Livescribe’s acquisition signals the end of an era – there is a small and rapidly dwindling market of people who simultaneously want to write and have it digitized. Most people in that market are shifting to the Galaxy Note or the iPad or another tablet with working stylus.

It is a shame to see this happen to a brand and product I have used and enjoyed, but at the same time my Livescribe is sitting on a shelf mostly unused and I just installed the Livescribe app on my iPhone 6S last week!

What do you think-does the buyout signal a new horizon or is it an IP grab only?

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About the Author

Michael Anderson
I have loved technology for as long as I can remember - and have been a computer gamer since the PDP-10! Mobile Technology has played a major role in my life - I have used an electronic companion since the HP95LX more than 20 years ago, and have been a 'Laptop First' person since my Compaq LTE Lite 3/20 and Powerbook 170 back in 1991! As an avid gamer and gadget-junkie I was constantly asked for my opinions on new technology, which led to writing small blurbs ... and eventually becoming a reviewer many years ago. My family is my biggest priority in life, and they alternate between loving and tolerating my gaming and gadget hobbies ... but ultimately benefits from the addition of technology to our lives!