Apple, Inc. Could Be Losing in the Classroom

By Markets

If only there were a keyboard. Image source: Apple.

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Education has always been an important market for Apple (NASDAQ: AAPL), perhaps more so philosophically than financially. That's why I was so optimistic about the iPad's potential in the classroom. It certainly seemed initially that mobile devices and digital textbooks had the potential to revolutionize education, but it's safe to say that Apple has not done so even if many schools around the country now buy iPads in volume for educational purposes.

The real challenge has been Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and its low-cost Chromebooks. Cost savings appeal quite a bit to school districts, particularly if the educational value is comparable. There's even a full-sized keyboard, too, which gives them more of a productivity feel. Kids still associate iPads with fun and games.

20 million and counting

Google has announced that Chromebook adoption among students and teachers using Google Classroom has now reached over 20 million. Compare that to the 10 million educational Chromebooks in use in October 2015, and it's clear that the search giant is making progress in the educational market. The news comes as a celebration of World Teachers' Day, which was yesterday.

Apple doesn't disclose any granular financial detail around its educational business, but it does take plenty of opportunities to note how important education is to the company. Apple launches back-to-school sales every year, and offers educational pricing to students and educators alike year round. But Chromebooks can speak to a school district's bottom line, and Apple isn't being as aggressive as it could.

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Apple should bring back older iPads for education

If Apple really wanted to overtake the educational market with iPads, there are several levers it could have pulled by now.

Remember how the iPad 2 from 2011 stuck around for an inordinate amount of time? Apple kept the second-generation tablet around for three years until finally discontinuing it in 2014. During that time, Apple lowered the price over time as it came out with new tablets, but even kept using the aging tablet at its own retail stores as informational product displays.

I'm not saying that Apple should bring back a five-year-old device to sell into the educational market, but Apple could very easily profitably manufacture and sell some older iPad model into the educational market at a price point that would put pressure on Chromebook sales. What about a 4th-generation iPad with Retina display from 2012, or an iPad Air from 2013? Those devices would still have relevance in the education market even if the consumer market has moved on, and I can't imagine they would cost much to manufacture.

It just seems like a wasted opportunity when there are strategic alternatives that could prevent the Chromebook from taking over.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.