There are reports the company is coordinating this with existing players in the textbook market including McGraw-Hill (MHP), Pearson (NYSE:PSO) and Houghton Mifflin Harcourt, as well as a college publisher called Cengage.
In theory this could be a big deal.
The U.S. higher education textbook market alone is said to be worth $10.25 billion, and Xplana estimated two years ago that digital textbooks could be 18% of that market by 2014, with sales of $1 billion. (The company thinks digital creation and distribution will shrink the market.)
Simba Information Services estimates the size of the K-12 market at $8 billion and CNET, quoting his biography, writes that the late Steve Jobs called the market "ripe for destruction" before his death last year.
But it's not that simple. States mandate the titles and content of textbooks. Texas has a huge influence on the market because it micro-manages this process, and it is a huge market. Other states, like Florida, also manage what kids learn, to the benefit of specific publishers like Harcourt-Mifflin.
On the college level, companies like Flat World Knowledge have made a market by signing professors to create e-books that are given to students free. The students then buy supplementary materials, and Flat World claims professors do just as well as under old models, while students do better. Existing publishers have had a digital joint-venture called CourseSmart since 2009.
Apple hopes that, by linking with existing leaders in the educational publishing market, it can not only connect with existing K-12 business models and processes, but sell a ton of iPads to kids. Savings on textbooks might even pay for the iPads.
Here's how they figure it. Mass sales of iPads to schools and colleges. Mass sales of iMacs to content creators. Plus a big chunk of the textbook market from the publishers. That could move millions of units at $500 each, hundreds of thousands of iMacs at $2,000 or more each, plus a cut of the textbook market.
But it's not that simple. The company traditionally takes 30% off the top on all content sales. Will it be willing to take less and take the blame when textbook prices don't go down? Many colleges already give computers to kids, either Macs or PC laptops. What might Apple's entry do to those arrangements?
Even if you estimate a $20 billion increase to revenues over three years, which is optimistic, note that Apple's current annual revenues come to $200 billion. How much this moves the needle, and thus the stock, remains to be seen.
How much of this homework Apple has done will be made clear on Thursday. Investors would be wise not to buy the hype and understand that, even if it succeeds, Apple will have to commit substantial resources and that, even if it were to suddenly take the entire textbook market from its many rivals, this might not add a lot to revenues.
The needle is very hard to move. But what do you think?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.