Crayola and Griffin have teamed up on a novel gadget and I was excited to see the final product, ever since I saw an early version at the Consumer Electronics Show in January. Together, they offer a free iPad app entitled Crayola ColorStudio HD and a $30 stylus (sold at BestBuy currently, with more outlets on the way). The app can work in finger mode, but it's designed to work with their oversized battery-powered stylus.
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