Almost immediately following Apple's education event, the internet was filled with claims that Apple's textbook plan will never work. Namely, that the current $500 entry price of an iPad is unreasonably expensive for schools or parents to afford.
Apple is not stupid. The publishers are not stupid. Yesterday's announcement was just the beginning, just a gimpse of what we can expect to see in the future. Baby steps. Take the timing of the announcement, for example. January is midway through the normal school year and months before the anticipated iPad 3. It was laying the groundwork.
Selling textbooks for $15 a pop to schools and students who can afford a $500 iPad may not sound like a promising business model, but Apple knows how to make money and, if there's one thing we can all agree on, it's that publishers are greedy. $15 is less than $40-$70 for traditional books, but when it's $15 for each student, each year, it starts to add up, coming very close to a $50-$70 book shared by 5 students over 5 years.
Apple famously runs the iTunes music and App Stores just above cost. They make their money on hardware sales, but it takes great content to drive those hardware sales. Apple also has longstanding relationships in education and has offered education discounts to schools and students alike.
My guess is that in addition to the anticipated iPad 3, Apple will also introduce an affordable iPad specifically for education. Perhaps it will be an iPad 2 discounted the way previous generation iPhones have been discounted for a few years now. Or perhaps it will be a special model available only to educational institutions. Apple doesn't need to make their traditional margins off the sale of such a device; they'll make some money off textbook sales, and they'll get far more once future generations are hooked into the Apple ecosystem.
Either way, it seems more than a little short-sighted to attack Apple on pricing so early in the process. Apple computers once cost tens of thousands of dollars and now a new MacBook Air starts at $1000. The original iPhone cost hundreds of dollars, now the iPhone 3GS is free on contract. Prices come down. Technology becomes democratized. It's happened with Apple for years; it seems silly to think it won't happen this time as well.
Now excuse me, I need to go work on a textbook of my very own. Using iBooks Author. You know, the extremely accessible, really powerful new ebook creator Apple just released. For free.
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