Is Apple losing market share in education?

If you listened to Apple's CFO, Peter Oppenheimer, on Tuesday's analyst call, the answer would be a fairly definitive no. The education market just stinks all around:You read the same things we do about the state budget situations and the school districts are under a lot of pressure in pretty much every state around the country.

If you listened to Apple's CFO, Peter Oppenheimer, on Tuesday's analyst call, the answer would be a fairly definitive no. The education market just stinks all around:

You read the same things we do about the state budget situations and the school districts are under a lot of pressure in pretty much every state around the country. I have seen no evidence we are losing market share in education and so I think it is really just a budget issue. We have now entered in the June quarter the education buying season. June tends to be more dominated by K-12 and then September will be more dominated typically by higher ed. This year we expect it to be competitive but we are going to put on our uniforms, suit up and we look forward to competing.

He's right about the pressure, at least. Grants are drying up and states budgets often run a year behind national trends as property taxes so often fund education (as homes are foreclosed upon or home values decrease, tax revenues also fall). This year was tough, but buoyed in many ways by stimulus funds. More stimulus funds are coming, but it's widely acknowledged that FY 2012 will not be pretty in education and many schools are tightening their belts now to prepare for a funding cliff.

Similarly, state universities and community colleges are seeing unprecedented demand as students can no longer afford private education. If a student is going off to school in the fall and looking to save money, what will be their computer of choice?

And how about those public K-12 schools struggling under financial "pressure"? I've argued for a long time that Apple's lack of entry-level computing hardware hurts it in a setting where price is king, no matter how good OS X might be or how slick the hardware might appear. Unfortunately, it isn't as simple as looking at Dell's cheapest models and Apple's cheapest models and then writing purchase orders for Dells.

This month, I took a long-term loaner MacBook Pro (no, not one of the new ones, darnit) and iPod Touch to evaluate as an educational platform, after my salesperson convinced me to look beyond the bottom line at a potentially important value proposition. Most of us, no matter how much we might like Linux or Windows, will acknowledge that creating content on a Mac and then pushing it to devices like the Touch or the iPad is really easy. We'll also most likely acknowledge that really easy is the name of the game if we want teachers to embrace 21st Century tools and pedagogy.

So far, with a few clicks I've pushed free podcasts from a variety of sources (NPR, Public Radio International, PBS, etc.) onto the Touch, loaded up PDFs and free eBooks, and automatically created audio files from text that I could listen to later on the Touch. I've organized and loaded up images and video and managed a collection of free learning apps like those from Smart.fm.

And there's the value: teachers enabled to create and manage content on inexpensive devices that students can all use in a cheap 1:1 environment.

So back to the original question: Is Apple losing market share in education, despite Oppenheimer's go-get-'em spin on a dismal market? Actually, I think Apple has the potential to gain market share by pushing iPads and iPod Touches as inexpensive 1:1 devices. However, what will that do to their profitability in education? Perhaps volume can make up for the high margins of the MacBook Pros and quad-core iMacs that only a small number of content creators might need. Regardless, Apple needs to keep in mind that students who use an iPad or an iPod in school may very well seek out Apple products later on. These devices actually provide Apple with a unique opportunity in education. Now we just need to see what happens as the tablet competitors roll out over the next few months.