Can Apple School the Academic World?
Jan 13, 2012 5:00 AM PT
Apple, in its typical cryptic way, announced Wednesday that it was holding a press event next week on "education."
It's anyone's guess what Apple will be announcing at the event scheduled for Jan. 19 at the Solomon R. Guggenheim Museum in New York City. But if a recent New York Times report is accurate, Apple will be pulling the wraps off a new initiative into digital textbooks.
If that's the case, Apple's choosing a good time to focus on that market, according to Rob Enderle, president and principal analyst with the Enderle Group. "Education is moving toward an e-book model, and it's going to be looking at a number of vendors to provide it with a solution," he told MacNewsWorld.
Such a move could also blunt attempts by Amazon to carve a place in the education market with its hot-selling Kindle Fire tablet, although its seven-inch screen size isn't as accommodating to electronic textbooks as the 9.7-inch screen on Apple's iPad.
"The black-and-white Kindle didn't display things very well," Enderle observed. "Clearly the Fire can do a better job, and Amazon, undoubtedly, is going to make another play for this business as well."
"The way textbooks are laid out, you really need a big page, so the Fire may be too small," he added, "but Amazon is expected to probably have a larger tablet out this year."
An intriguing path of speculation leading up to the Apple announcement is whether the event will be about K-12 education or higher education.
In the authorized biography of Steve Jobs by Walter Isaacson, Apple's cofounder said he wanted to transform the textbook market by producing free textbooks. That could also be a way to skirt a potential obstacle to such books: state certification of textbooks for grades K-12.
However, the more lucrative channel for electronic texts is the higher education market, according to Philadelphia-based education consultant Scott Testa. "The publishing cash cow, historically, has been college textbooks," he told MacNewsWorld. "There's not as much money in K-12."
For a long time, publishers dragged their heels on embracing electronic textbooks because they dreaded piracy, Testa explained. "Their biggest fear was what happened to the music industry would happen to textbooks, where 95 percent of music is copied and stolen, and 5 percent is paid for," he said.
But new electronic players in the market have forced textbook publishers to reevaluate their business models, he noted. "They're asking themselves, do we cut our margins from 50 to 60 percent to 30 or lose the sale altogether and get zero margins?" he observed.
One of those new textbook players is Flat World Knowledge. It has an open source model for its book line. Institutions or instructors who buy a text from Flat World receive an open license.
"That allows them to interact with our content in unfettered ways," Flat World CEO Jeff Shelstad told MacNewsWorld.
In addition, students are allowed to access the book online for free. Flat World's cash flow comes from ancillary items. If a student wants a hard copy of a book, they have to buy it. The same is true if they want versions of the book as a PDF, ePub or audio file, or if they want study aids for the book.
"We want to tear down the walls to access to our content," Shelstad said. "We think access and affordability enables learning. The way we do that is to make our Web books free online."
Apple's announcement next week will signal that the company is returning to a familiar realm, according to Enderle.
"Education has always been Apple's seed corn," he said. "Apple had been strong in education. It lost that in the '90s, and it has been trying to recapture that during the last decade."
He believes education will be a priority for the successor to Jobs, Tim Cook. "He's showing a much stronger interest in philanthropy and education," he said.
"I think it was a big mistake for Apple to give up on education because what kids use in school is what they end up using at work," he added.