Apple education event shows company hasn’t learned its lesson

Scott Olson/Getty Images
The new 9.7-inch Apple iPad is introduced during an event at Lane Tech College Prep High School in Chicago Tuesday.

Much like in the consumer market, Apple Inc. AAPL, -2.56%  thinks that it can win the education market with its closed ecosystem — more so than with price-competitive products.

The world’s most valuable company offered little on the product side Tuesday to entice school systems to choose iPads over the cheaper tablets and Chromebooks made by rivals, focusing instead on new software.

At an education event at a public, college-preparatory high school in Chicago, the company announced a new, though barely updated, 9.7-inch iPad that will cost $299 for educators, just $30 less than what the device will cost ordinary users. Students will be able to get the Apple Pencil stylus, which can be used with the new iPad, for $89, marking a $10 discount. Apple also said that a cheaper third-party Crayon stylus, as well as a compatible keyboard case, would be available for $49 and $99, respectively.

See also: Facebook could face huge fines in FTC investigation

For context, the cheapest Chromebooks from companies like HP Inc.  HPQ, -1.94%  and Lenovo Group Ltd. 0992, +1.46% which run using Alphabet Inc.’s GOOGL, -4.47%  software, can cost just under $200 and come with a keyboard. The full iPad package would come out to more than twice that price.

Apple didn’t announce any new or updated Macs at the event, as some Apple watchers had speculated.

It did say that the iPad’s new A10 Fusion chip would make it “more powerful than every Chromebook.”

Apple placed a greater emphasis on education software, seemingly with the hope that school systems will be willing to pay premium prices for its tablets if they get access to interesting tools, much the way consumers pay up for iPhones in order to use the iOS platform.

Among the tools Apple featured were an app called Schoolwork, which lets teachers assign work to students, and ClassKit, a developer platform. The company also talked up creativity software such as Clips, a once-hyped video-editing app, and GarageBand, as well as opportunities to use augmented-reality tools in the classroom.

Apple has plenty of catching up to do in the education market. Estimates from Futuresource Consulting say that the company had just a 17% share of the K-12 market in the third quarter of last year, with most of that share coming from iPads and the remainder coming from Macs. Devices running Google’s Chrome operating system accounted for 60% of shipments, the data show, while those running Microsoft Corp. MSFT, -4.60%  Windows software accounted for 22%.

Don’t miss: Fake-news concerns haven’t diminished love for YouTube: report

The education market represents perhaps 10% to 15% of Apple’s overall business, according to Gene Munster, a former Apple analyst at Piper Jaffray who now works for venture-capital firm Loup Ventures. He wrote Tuesday that the iPad is strongest with elementary schools, while Chromebooks are preferable with older grades, adding that “we don’t think today’s announcements change that dynamic.”

By some accounts, Apple’s latest announcements show the company still hasn’t learned its lesson from the last few years of Chromebook ascent. That is, the education market and consumer market are fundamentally different. Unlike ordinary consumers, school districts are both price- and utility-conscious, and they must ultimately justify paying double for devices in order to get access to AR tools and video-editing software.

Apple shares were down nearly 3% in Tuesday trading, reversing earlier gains, including an initial blip higher as the unveiling began. Shares are up 19% over the past 12 months, compared with a 16% gain for the Dow Jones Industrial Average DJIA, -1.43% of which Apple is a component.