Will iPads Replace Textbooks In K-12 Classrooms?

Nov. 01, 2012 8:19 AM ETApple Inc. (AAPL)SPGI, PSO47 Comments
Kyle Spencer profile picture
Kyle Spencer

Tim Cook wants to put an iPad Mini in the hands of every K-12 student in America. While reviewers pick over Apple's (NASDAQ:AAPL) recent line of products and analysts comb though the iPhone 5 sales projections, the real story - Apple's push into America's classroom - is being largely ignored. That's a mistake.

The 21st Century Classroom

Federal, state and local governments will spend $916 billion on education in 2013, of which $644.9 billion (about $11,655 per student) is spent on K-12 education.

Apple currently has the world's largest education sales force, and small wonder: An iPad in the hands of every student would mean an additional $23 billion in iPad sales from the K-12 market alone on a biannual basis, with most of the funding supplied on the federal level, i.e. grants like Race to the Top.

The adoption of Apple's ecosystem would tap local IT budgets as well, potentially adding another $19 billion to Apple's gross revenues.

But public school IT budgets of are just the tip of the iceberg. Cupertino's real target is the $8 billion textbook market, of which only $3.2 billion is currently "locked in" by school contracts with "The Big 3" publishers: McGraw-Hill (MHP), Pearson (PSO) and Houghton Mifflin Harcourt. Together, these three companies provide 90% of the textbooks available to high schools, and all of them are currently partnering with Apple.

The Rebellion of McGraw-Hill

However, there are warning signs that the days of the Apple/McGraw- Hill partnership may be numbered. In a recent interview with TPM Idea Lab, McGraw Hill senior vice president Vineet Madan ridiculed the iPad Mini as an educational tool, implying that the Mini was a frankenstein device, saying:

It's almost like a 'Jeopardy' question. If you said 'iPad Mini,' I don't know quite what the question would be that I would buzz-in. Is it

This article was written by

Kyle Spencer profile picture
Over 15 years as an IT Consultant for a wide range of clients including Dell, Ingram Micro, BankAm South and FedEx Data Center. Specializes in technology, contrarian plays and global macro. My articles have appeared on Morningstar.com, IHIQS, Seeking Alpha, Yahoo! Finance, MarketWatch, EIN Newsdesk, Google Finance, Motley Fool, MSN Money, and AOL Daily Finance.

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