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IDC on Tablet Market Share in Education: Dominance Can Be Fleeting

When Tim Cook announced earlier this week during an Apple earnings call that his company had achieved 94 percent of the education tablet market and earned more than a billion dollars in revenue for the first time in its education business, the news rightly sent the blogosphere into overdrive. "I mean, that's sort of unheard of. I've never seen a market share that high before," said Cook in the call. "So we feel like we're doing really well here and feel great to be making a contribution to education."

CNET headlined its coverage: "Apple CEO: We've locked up 94% of education tablet market." VentureBeat declared, "Apple’s record quarter in education: iPad has 94% of tablet market." "Apple's education sales breached $1B for first time ever in Q3, iPad share at 94%," shouted Apple Insider.

Technically speaking, the actual count was closer to 93.6 percent, according to an Apple spokesman. But what's lesser reported is where that estimate came from to begin with: research by IDC. THE Journal recently caught up with IDC Research Director of Tablets Tom Mainelli to find out what's going on in the education space regarding tablet adoption. The following is an edited version of that discussion.

According to Mainelli, in the second quarter of 2013 Apple shipped nearly a million tablets into the U.S. K-12 market. That represented 93.5 percent of all tablets shipped into K-12. By the end of the year IDC expects the total number of tablets shipped into K-12 to reach 3.5 million units.

THE Journal: What does 94 percent of the education tablet market mean?

Tom Mainelli: To be clear, that's a United States number, not a worldwide number. Apple has built on the success they have traditionally had in education. And right now, frankly, nobody's all that competitive with them when it comes to tablets. In fact, the thing I keep hearing is that Apple is competing more with Google and Chromebooks than they are with other tablets at this point.

Just as Apple really jump-started in the tablet market with the iPad in 2010 and enjoyed a long lead while everybody else played catch-up, they're kind of doing the same thing in education right now.

One thing of note is that other vendors have certainly caught on to the fact that Apple is building quite a big lead in education. So we have seen traditional PC vendors start to get very serious about tablets in education, like Dell. We've seen Samsung start to train their focus on getting more tablets into education. One of the things that Samsung has done is try to get Android more accepted into the enterprise by adding a lot of security to Android. So they think that might give them an opportunity in education. Then Microsoft, particularly with Surface, has really started to gear up its efforts.

Amazon is getting serious about education as well. Obviously they've got deep ties to publishers, and they've got a [print] school book business. But what we have seen them do with the Kindle e-reader and now the Kindle Fire is put more features into the tablet that would make it [not only] more commercial-friendly, but student-friendly. The original versions were little more than glorified e-readers. But now they're adding [support for virtual private networks] and email and word processing and other things you would need to have on a tablet.

And they're aggressively growing the app ecosystem. So the Kindle Fire runs a forked version of Android. They are finding that developers oftentimes are more interested in developing for the Kindle Fire than the wider Android world, because if you happen to be an Amazon customer and you buy a Kindle fire, then you're probably pretty comfortable spending money with Amazon, including apps.

Does 94 percent translate to an important number overall in the scheme of computing devices being used in education?

There are two things going on. Tablets are certainly sexier right now than PCs. School systems are maybe finding it easier to get the money necessary to make these purchases, whether it's coming from traditional sources or parents. The other thing is, I do think the interface on a tablet lends itself to a more interactive experience than the typical touch pad and keyboard notebook.

And I think we're at the very beginning of what educators and app developers and the hardware guys are going to be able to do in terms of making these devices more than just a glorified typewriter.

Now, the problem is, if you just buy 100 iPads and throw them into a school, they're no better than a notebook. You've got to have the money and planning to have the right apps, to know how to use the apps. You've got to have teachers that are interested in exploring what they can do with a tablet.

How big is the education segment compared to other segments?

Right now, we are not breaking out any other markets. We have detailed breakouts on PC markets. On tablets all we have is consumer vs. commercial. Education is actually a subset of commercial. And we've done that, to be honest, because we've been getting a lot of requests for it.

The U.S. market is very different from most of the markets overseas. In the U.S. Apple has really been dominant. In a lot of regions overseas, they're actually doing these giant deals where, for lack of a better word, the tablet — a $100 Android tablet — is "thrown in."

So that market share doesn't encompass any BYOD.

No. In fact, the BYOD would by and large be encompassed within the consumer numbers. One thing we know from all our surveys is that well over half of tablet owners carry their own tablet into the office. A good percentage of them use it for work in some way, shape, or form — email or doing Web browsing.

Does the education number cover just K-12 or also higher ed?

We do have higher ed, but frankly, the higher ed numbers are pretty low, because most tablets being used in higher ed were actually purchased by the student and carried in. I think that may evolve over time, but that's been the trend so far.

What impact does the 640,000 iPads that Los Angeles Unified is putting in place have on Apple's positioning in the education market? Is it going to be positive or negative?

Up until some of the recent stories started coming out, it was all positive. It was such a big deal and such a big number. It gets back to what I said earlier. It's one thing to have a great idea and to spend the money on the hardware. But if you don't know what you're doing in terms of implementation and securing the devices and making sure the devices are being used for the purposes they were being purchased, that's a problem. That's always been the problem with education and technology. Big ideas that aren't always well implemented or thought through. It's easy to raise money to buy the tablets. It's harder to pay the IT guy who's got to keep the Wi-Fi up and running and the devices up to date.

So I think long-term it will probably be a net positive. But it's just like anything else. There's always going to be speed bumps. And that's is such a big deal. Nothing is going to fly under the radar on that one.

What are the risks education faces when one company dominates the market so forcefully?

You always want competition, and not just for the endpoint, the hardware itself. But you want the app developers that are creating educational apps to have options, that they're not restricted to one platform.

We talk a lot about the rapid growth of Android both in smartphones and tablets. The shipment numbers are there, which means developers are interested. And yet, there are many more iPad applications than there are Android tablet applications.

That just reflects the fact that when you buy a high-end piece of hardware, like the iPad, you are probably willing to spend good money on apps to run on it. When you buy a $99 tablet, you're probably not going to spend a lot of money on apps. Choice is good, but the business will only evolve if there are sustainable margins and everybody sort of wins in the end — most importantly, the students.

If you were a school tech leader, which devices would you make sure to have on that evaluation list?

Certainly, the iPad would be front and center. I would be exploring my options with Android. So the frontrunners there would be Samsung and possibly Lenovo. And then the Kindle Fire is sort of its own flavor of Android.

Then there's Windows. One thing that most IT folks are comfortable with — and I think this includes education IT folks — is supporting Windows. Today Windows tablets have been sort of a tough sell. They've been too expensive, with an operating system that's sort of a mix between notebook and tablet. But new versions of Windows, new processors, and new hardware are going to make Windows a lot more interesting in the fourth quarter of this year and in the next year when schools actually start buying.

There's a lot more options out there today than there were even six months ago.

Another thing worth mentioning. A lot of schools embraced netbooks a few years ago. Netbooks have, for the most part, gone away now. A lot of schools look at Chromebooks and Google Docs as the replacement for netbooks — and oh, by the way, you don't have to pay for Office. That's one thing I've heard over and over: It's less about who Apple is competing with in terms of tablets. It's, do we buy iPads or do we buy Chromebooks?

Do you have any sense of what's driving schools or districts one way or the other?

The touch interface has got a lot of promise, and there is a lot of cool stuff you can do with it. At the end of the day, kids are still going to need to input data. A Chromebook is interesting because it's got that keyboard. If you buy that iPad, you end up spending an extra $50 to $100 to add a keyboard to that device. It's the same with the Surface.

Like anything, it's probably better to not take a one-size-fits-all approach. Younger kids are probably better served by a tablet. Older kids who need to write reports may be better served by a device with a keyboard.

And you can't underestimate the cost savings when you don't have to pay for Office. Even presuming that Microsoft gives schools a good deal, it's just a recurring cost, and Google will give it to you for free. It's limited in some ways, but it gets better every day.

One other thing that's worth noting: Apple has made iWork, [Apple's suite of applications], free. I don't know whether anybody in education actually uses iWork.

What should readers keep in mind when companies make statements about market share such as Apple just did?

It's always good to consider the source. I happen to think our data is good.

The double-edged sword for Apple — and we've seen this happen in their [overall worldwide] tablet share — is that they went from 75 percent of the market to 30 percent of the market. When you have such a dominant position, there's really only way for you to go. Can they hold onto 94 percent of the market when Dell, Microsoft, Google, and everybody else is gunning for them? It's going to be hard.

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