Square Panda phonics playset is designed for adoption by elementary schools to enhance student engagement in early reading and teacher engagement in student progress. This novel technological product combines computer-aided instruction with hands-on physical letter manipulatives to improve literacy outcomes in early readers. Unlike other literacy products, the product was designed around low-cost solutions that maximize learning without support of highly trained reading specialists, and thus might be especially attractive to Title I schools. The Square Panda approach builds on four research-based principles of learning that will be reviewed in this presentation: 1) Use of physical manipulative letters increases attention and engagement, 2) Multisensory teaching of letter-sound correspondences through systematic and comprehensive instruction, 3) Physical Manipulatives to help bridge the analog-to-digital divide, and 4) the use of adaptive learning data for individualized instruction.