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Apple is Playing the Long Game with iBooks 2 and iTunesU App

This article was originally posted at e-Literate

When Apple made the iBooks Author / iBooks2 / iTunesU app announcement on January 19th, there were many arguments for and against their implied educational market strategy. In the educational technology community, two of the most intense arguments why Apple’s move was faulty, or even harmful, came down to the cost and availability of iPads in education. The source of the problems was that Apple made their products wholly dependent on iPad usage.

  • The iPad costs ~$500 or more, making the cost benefits of $15 textbooks almost a moot point – with a higher cost of ownership than even traditional paper textbooks.
  • For real pedagogical benefits, all students in a course or program would need to have an iPad – since most students don’t have these tablets, the only way to solve would be one-to-one school purchases for students.

There are other arguments to be made against Apple’s strategy, but I want to focus on these two inter-related problems.

With the disclosure of two remarkable facts and one price break during the new iPad announcement, it is becoming apparent that Apple is playing the long game with their educational strategy, planning to address the problems of cost and availability over time rather than trying to win the argument with today’s numbers. Watch the trends, not the snapshot of today.

We’ve been used to PC and internet availability for so long that we generally accept that educational tools relying on the PC are valid for classroom or online usage (not in all cases, but it is a realistic assumption in most cases that PCs and internet are available). In Apple’s view, the PC as an end market is already being replaced by mobile devices, particularly the iPad. PCs and laptops are tools to augment the ecosystem and value of the device – a means to an end.

Consider these two facts based on this week’s announcement.

Business Insider: Apple sold 15.4 million iPads last quarter. That’s more than any PC maker’s TOTAL PC sales during the same quarter.

Beta News: Last year’s iOS device sales reached 172 million, Apple revealed today during a special media event for the third generation iPad. CEO Tim Cook said “Post-PC devices” account for 76 percent of Apple revenues.

In addition, the iPad2 just had the price dropped by $100 to $399. As TheNextWeb has explained, this price drop for the iPad2 is not just a sell-off of inventory, but is in fact central to Apple’s strategy.

The iPad 2 is an insanely popular device, with Apple moving 15.43 million units in the first quarter of 2012 alone, making it easily the best selling tablet of all time. [snip]

People are still seriously interested in the ‘old’ iPad. And Apple is able to offer it at a significant discount because of its leverage of the economies of scale due to insane profits. It also gains an edge by paying for manufacturers to construct factories, purchase machines, train employees and perfect the process. It takes its repayment in the form of exclusive access to the tech for a given period of time and a discount on purchases for a period of time after that.

This makes it possible for Apple to have exclusive access to groundbreaking technology at bargain prices, contributing to the products being not only more advanced, but also cheaper to make.

Apple is aggressively moving to make the iPad cheaper and cheaper to build while eyeing the situation where tablets in general, and iPads in particular, are nearly ubiquitous. When you understand these trends, the iBooks Author / iBooks 2 / iTunesU App strategy for education makes a lot more sense.

I’m not arguing that Apple will resolve all arguments against its strategy or even that the closed ecosystem approach is good for education. My point is simply that the current market is not static, and we need to look at trends to understand where Apple is moving.

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