May 1, 2001 6:20 PM PDT

Apple thinks "education" with new iBooks

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April 12, 2001
CUPERTINO, Calif.--From the design of the new iBook to the timing of its launch, Apple Computer is aiming the laptop to make its home inside schools.

Apple lost the top spot in education sales to Dell Computer last year. But Apple CEO Steve Jobs said Tuesday that the company has actually seen its market share grow in the education market's laptop segment, which he calls the fastest-growing part of the market aimed at schools.

Apple saw its share of the education notebook market grow to 26 percent in the fourth quarter of last year, Jobs said, compared with 18 percent for the full year. With the iBook and other efforts aimed at the school market, Jobs said Apple hopes to retake the top spot overall.

"We really feel deeply about this," Jobs said when he unveiled the new iBooks at the company's headquarters here. "It's in the DNA of our company."

Apple is looking to rebound after moving its education sales force in-house last year. Apple executives have said that the move, made during the height of last year's education buying season, was ill-timed and poorly handled.

In addition, sales of the old iBooks have been disappointing lately. Unit shipments of iBooks were down 52 percent in the first three months of 2001 compared with the same period last year, according to Apple.

Several of the new features on the iBook were designed with schools in mind, said Greg Joswiak, senior director of product marketing for Apple's portable lines.

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Apple targets education market
Chris LeTocq, analyst, Guernsey Research
For instance, the new iBook closes via a magnetic latch that appears only as the notebook is just about to close. That prevents the latch from being broken off as is possible in the rough-and-tumble school environment.

In addition, the new iBook can be hooked up to a television or projector, both of high importance in schools. This allows a teacher, for example, to show off a project on the iBook to an entire classroom.

The launch of the new iBook also comes in the middle of the education buying season, said Cheryl Vedoe, Apple's vice president of education marketing.

Apple asserts it is off to a good start, having signed the industry's biggest education laptop deal ever. The Henrico County Public Schools in Richmond, Va., has agreed to buy 23,000 of the new iBooks.

Guernsey Research analyst Chris Le Tocq said Apple made a strong statement with the iBook. "This is what they had to do to get things rolling again for education," Le Tocq said.

Apple has signed a number of deals for the prior generation of iBooks; Henrico was the first school district to get a crack at the new iBooks. Henrico Superintendent Mark Edwards said the district had been planning a big laptop buy since November but learned only recently that it would be able to get the new iBooks.

"We wanted to do a major laptop deployment," said Edwards, who noted the district has been shifting much of its curriculum to digital media.

Edwards said his district, where Macs make up 90 percent of the computers in schools, diverted money from textbooks and paper to pay for the four-year lease on the new iBooks. The lease is expected to cost $18.4 million over the first two years.

The key to boosting overall education sales is making computers that are thinner and lighter, Joswiak said, noting that the original iBook was just too heavy for younger students.

"One thing it needed to be was easier for kids to lug around," Joswiak said.

However, slimming down the iBook has created a marketing challenge for Apple. The company says that a magnesium frame, polycarbonate case and rubber-mounted drives make the new iBooks twice as durable as their bulkier predecessors, but Joswiak acknowledged that Apple will have to work hard to convince buyers of that.

"People immediately thought: 'It's smaller and lighter, it must be less durable,'" Joswiak said.

On the consumer side, Apple's marketing task is simpler. The company will be looking to build on the popularity of its sleek Titanium PowerBook G4, which the new iBook shares a number of similarities with.

"Obviously it was well into development by the time Titanium was released," Joswiak said. But "we knew while Titanium was being developed that it was something special."

 

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