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Apple Scores in the Education Market

Little by little, the Apple (NASDAQ: AAPL  ) iPad continues to make headway in the education market. Last week, the company announced that it will supply the Los Angeles Unified School District with $30 million worth of iPads. Starting this fall, the country's second-largest school district will begin to outfit each student with their very own iPad, which it expects will be completed in 2014. Upon completion, the LA School District will become the largest school district in the nation to give all of its students the iPad.

Add this to the tally!
According to Philip Schiller, Apple's senior vice president of worldwide marketing, nearly 10 million iPads are already in the education system. Based on the iPad's average selling price of $449 during its fiscal second quarter, Apple has cumulatively raked in nearly $4.5 billion from education alone.

According to IDC, annual tablet shipments to the education sector grew by 103% in 2012. As a result, the share of tablets in the education client device market grew from 19.4% in 2011 to 35.4% in 2012. Going forward, IDC expects this is just the beginning of a trend where tablets make up a greater share of education client devices. A key growth driver will be government mandates to digitize education coupled with the relatively low cost of tablets.

The mother of all opportunities
Back in February, it was widely reported that Apple was in the running for a massive contract with the Turkish government to supply up to 15 million students with iPads. Just a few weeks ago, the Turkish Prime Minister was seen visiting Apple's headquarters to hear the company's final pitch. If a deal is reached, it's expected to bring in about $3 billion to $4 billion in revenue over the next four years, which initially will translate to 10.6 million tablets. However, investors shouldn't bank on this being a done deal, because Google and Microsoft are also reported to be in the running.

If Apple does land the deal, it reinforces that its streamlined user experience is unmatched, making it a perfect fit for the education market. Given the deal's size, it could also be the catalyst that gets Apple investors excited again about the company's growth prospects.

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9/30/2016 4:00 PM
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