Apple Inc. (AAPL) has been selling thousands of iPads to grade schools since its 2010 debut. Now it plans to beef up the educational content available for the tablet so teachers and students find those purchases worthwhile.
At an event in New York tomorrow, Apple will announce a set of tools that make it easier to publish interactive textbooks and other digital educational content, said two people with knowledge of the announcement, who requested anonymity because they weren’t authorized to speak publicly.
The plans, to be unveiled by Apple Internet software chief Eddy Cue, are aimed at broadening the educational materials available for the iPad, especially for students in kindergarten to 12th grade, the people said. By setting its sights on the $10 billion-a-year textbook industry, Apple is using the tablet to encourage students to shun costly tomes that weigh down backpacks in favor of less-expensive, interactive digital books that can be updated anywhere via the Web.
“Apple will raise a lot of awareness about digital textbooks and how education is going digital,” said Osman Rashid, whose company, Kno Inc., develops e-textbook software.
Apple’s new software is designed for a broad range of authors to be able to publish the content in a digital format, similar to what Amazon.com Inc. (AMZN) does with its direct publishing tools, said the people. Large publishers will be able to create digital versions of textbooks, with embedded graphics and video.
Creating Teaching Tools
Apple also wants to empower “self-publishers” to create new kinds of teaching tools, said the people. Teachers could use it to design materials for that week’s lesson. Scientists, historians and other authors could publish professional-looking content without a deal with a publisher.
Apple is likely to promote a modified version of the ePub standard, the format used by many e-book publishers, said the people familiar with the company’s plans. Natalie Kerris, a spokeswoman for Apple, declined to comment.
Education is one piece of how Apple’s iPad became the fastest-selling consumer electronics product in history. As of September, Apple had sold about 40 million iPads, generating $25.3 billion in sales. The device is now Apple’s second-best selling product, behind the iPhone and ahead of Mac personal computers and iPod music players.
While the event is expected to aid iPad sales to educators, Gene Munster, an analyst at Piper Jaffray Cos., said the event won’t have a material impact on the company’s shares. No new hardware products are expected to be unveiled.
Education Sales Force
Apple is building upon a presence in education that was established when its earliest computers won a following among students and schools in the 1980s. A dedicated piece of the company’s sales force reaches out to school districts and universities to pitch Apple’s products for the classroom.
In a sign of that effort’s success, New Jersey’s Hasbrouck Heights School District bought 250 tablets last year for use in algebra classes. Nevada’s Clark County School District paid $687 per iPad in a trial program so 1,150 Las Vegas middle- and high- school students could use iPads loaded with the same algebra material, made by publisher Houghton Mifflin Harcourt.
The purchases come even as school districts grapple with budget shortfalls, challenging educators to choose where they allocate funds, said Jay Diskey, executive director of the Association of American Publishers’ school division.
“It’s important to look at the issue of K-12 textbooks through the prism of government procurement,” Diskey said. “Many states and school districts are strapped for cash.”
Justifying the Price
In some cases, the price of the iPad -- which starts at $499 -- is keeping school districts from making the purchases, said Bethlam Forsa, the head of content and product development for Houghton.
“The price is an issue,” she said. “The key area of focus is to ensure there is enough content out there to justify the price.” Just after the iPad was introduced, Forsa said the company committed to developing new educational material.
Apple co-founder Steve Jobs had focused on the textbook business before his death in October. He told biographer Walter Isaacson that the industry was ripe for a digital disruption because of the interactive capabilities made possible by the iPad. Jobs had held meetings with publishers, including Pearson Education Inc., about teaming up with Apple, according to Issacson’s book, “Steve Jobs,” published last year. Jobs wanted to create electronic texts and curriculum material for the iPad.
Jobs had lured John Couch, one of Apple’s early employees, back to the company in 2002 to help lead its push in education, one person familiar with Couch’s role said. Roger Rosner, a vice president of productivity applications, led the engineering effort, said the person.
Fraction of Market
The electronic-textbook market is still nascent. On college campuses, even as the latest best-sellers have become popular for devices such as Amazon’s Kindle, digital textbooks were just 2.8 percent of total textbook sales in 2010, according to the National Association of College Stores.
A March survey of 655 college students by the Oberlin, Ohio-based trade group found that three-quarters of students preferred a printed textbook to an electronic version. That’s even though e-textbooks cost as much as 60 percent less than new print copies, which averaged $62 each in the 2009-2010 school year.
“E-textbooks have had a slow go of it,” said Charles Schmidt, a spokesman for the college stores group. He attributes the lackluster interest to students not being as technologically adventurous when it comes to education texts, professors sticking to traditional course materials, and publishers not offering compelling interactive content.
As more of these features are added and as the iPad and other tablets become more popular, Schmidt said the prevalence of digital texts will increase. He predicts digital college- course materials will account for 10 percent to 15 percent of the market in the next school year.
Among the schools making more materials available in digital formats is Harvard Business School, which is converting a library of 17,000 case studies to tablet-enhanced formats.
Along with Apple, software companies such as Inkling Systems Inc. and Kno have been working with publishers like Pearson’s and McGraw-Hill Cos. (MHP) to make their content more compelling. In Inkling’s version of the best-selling textbook “Campbell Biology,” students can navigate 3-D pictures of cells, listen to the proper pronunciation of a word or quiz themselves.
Still, the iPad needs more content to be able to become a common tool, said Bill Rieders, executive vice president at Cengage Learning, a publisher of higher-education textbooks that makes its materials available in digital form.
“It is too early to tell if it has improved education,” Rieders said. “The jury is still out.”
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