Silicon Valley startup Desmos Inc. is going after one of the oldest names in technology, Texas Instruments Inc., in an area not normally associated with cutting-edge innovation: handheld calculators.
Founded in 2011, Desmos has developed a free graphing calculator program that runs on smartphones and computers, eliminating the need for a separate device. The downloadable app has won users and the endorsement of the same testing organizations and textbook publishers that approved Texas Instruments products for tests such as the SAT college entrance exam.
Just this week, a group called the Smarter Balanced Assessment Consortium gave Desmos its blessing. The organization oversees some standardized testing for middle- and high-school students in 15 states, including California, Connecticut and Michigan.
“We think students shouldn’t have to purchase this old technology that predates the internet,” said Eli Luberoff, the company founder. “This market is shifting. A monopoly is crumbling.”
Calculators such as the TI-84 are a staple for most college-bound students in the U.S. They retail for about $100, with fancier models going for more than twice that. According to Desmos, they’re made with old, underpowered technology that’s no match for the capabilities of even a mid-range smartphone or low-end laptop.
Their limitations are a good thing, according to Dallas-based Texas Instruments, which debuted its first pocket calculator in 1967.
“Our products include only the features that students need in the classroom, without the many distractions or test security concerns that come with smartphones, tablets and internet access,” said Peter Balyta, president of education technology at Texas Instruments. While online apps can be free, they require a connection and devices to access them, he said. That’s an expense that can add up for schools or individuals.
Desmos counters that, as tests move online themselves, its calculator can be integrated into the exam. Such software locks down computers not allowing anything other than the test. Because its software is free to students, it also removes the financial burden on cash-strapped households. Texas Instruments, which started life as Geophysical Service Inc. in 1930, doesn’t break out calculator revenue. Sales of the devices are included in a category that includes licensing income and other some other chips. That group accounted for 4 percent of the company’s $13.4 billion in 2016 sales.
Desmos’s software racks up 300,000 hours of use by students in 146 countries every month, the startup said. While it offers the software free to individuals, it charges organizations such as publishers that use it, providing the San Francisco-based company with its revenue. Luberoff founded the company after working as a math tutor, where he saw a market for math education as curriculum and students moved online.
The company secured about $1 million in seed funding in 2011 from investors including Learn Capital, Kindler Capital and Mitchell Kapor, as it built the product and a revenue model. The startup also received an investment from GV, formerly Google Ventures, in 2012.
Desmos has the backing of Pearson, the world’s largest education company. Pearson is using it as a partner for its high-school math program, enVision. The College Board, which administers the SAT and Advance Placement tests, has endorsed the use of Desmos for its SpringBoard platform, which provides study drills, practice exams and curriculum assessments for students and teachers. Such tie-ups are the key to breaking into the market, according to Luberoff. One company has enjoyed a near market monopoly on the sale of graphing calculators for more than 27 years, thanks to strategic relationships with textbook publishers, statewide testing companies, college entrance exam makers and little outside competition, he said.
“Calculator functionality hasn’t significantly increased nor has its price decreased in decades,” he said.