There's no denying Apple's (NASDAQ:AAPL) had some great success in the education space. CEO Tim Cook said last year that the iPad held 94% of the education tablet market, and the company topped $1 billion in education sales at the same time.
But while Apple is dominating in education tablets, the latest numbers from IDC, first reported by the Financial Times, show that Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) shipped more Chromebooks to schools in the Q3 2014 than Apple shipped iPads.
That may not seem like a big deal at first blush, but it's the first quarter in which Chromebooks outpaced iPad shipments to schools, and it marks the continuing expansion of Google's laptops. Both Apple and Google are very interested in the U.S. education-technology space, considering the market size is expected to grow from about $5.4 billion right now to $13.4 billion by 2017, according to GSV Advisors.
So what is Google doing right?
Why Chromebooks are growing
In the third quarter, Google shipped 715,000 Chromebooks to the education market, while Apple shipped 702,000. That's not a huge difference, but it's significant considering Chromebooks didn't even exist a few years ago -- and now they account for about a quarter of devices in the education market.
There are several factors pushing Google's devices ahead of iPads, with cost being one of the most important. Samsung, Hewlett-Packard, and others sell Chromebooks as low as $199, while Apple's iPad go for about $380 with the educational discount. But that's not the real cost for schools. After adding keyboards to iPads (which many students needs for writing tests) the iPad costs are even higher.
Aside from cheaper prices, Google's made Chomebooks especially easy for sharing. There are no apps to download and install, instead everything is tied to a Google login. So the devices are easily interchanged and shared in ways the iPad simply can't be. And then there's the fact that mice, monitors, flash drives, and the like are easily connected Chromebooks, while the iPad needs special adaptors for such connections.
Add all this up and its easy to see why Chromebooks are taking off in schools. But it's not just IDC that's noticing the trend. Back in July, NPD Group reported Chromebook's growth in the education sector as well. "Building on last year's surprising strength, Chrome's unit strength ahead of this year's education buying season shows how it has become a legitimate third platform alongside Windows and Mac OS X and iOS," said Stephen Baker, NPD's vice president of industry analysis.
Chromebooks show no sign of slowing down, either. In 2013, Google sold 2.9 million of the devices, and that number's expected to climb to 14.4 million in 2017, according to Gartner.
What it means for Apple
It's easy to assume that Apple isn't in any trouble in the education sector right now. The company is dominating in tablet sales to schools, and when you factor in MacBooks, Apple still shipped more devices to schools in the third quarter than Google.
But for more than a year we've seen Chromebooks continue to grow in education sales. It'd be easy to dismiss Chromebooks because they've only outpaced iPad education shipments in just one quarter, but that would be ignoring the bigger trend. The fact is that schools have realized Chromebooks offer not just a cheaper alternative to the iPad, but also a more functional device at the same time. In that that sense, there's little incentive for the education sector to reverse its growing trend toward Chromebooks, which could eventually push down iPad sales.
IDC expects that 2014 "will represent the first full year of decline in iPad shipments," so it appears that the education market isn't the only area Apple's seeing a pullback. If there's a bright side, it's that iPad sales represent just 12.6% of Apple's total revenue, while its iPhone, which is selling like gangbusters, accounts for 56%. Still, Apple can't be happy about the state of its tablets in education or otherwise, and neither should the company's investors.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.