Many, including myself, wondered if today’s Apple announcement would be the kiss of death for digital textbook startups like Kno, Inkling and Chegg. Now, it seems as if Apple as well as the three big publishers Pearson, MacGraw-Hill and Houghton Mifflin Harcourt did not plan to attack the college space just yet.
Today’s announcement covers the high school space only hence just one part of the overall textbook market. From now on students can purchase their textbooks for $14.95 instead of $75 which is the common price for the physical version.
Peter Kafka on AllThingsD did the math and came up with the conclusion that currently physical textbooks are generally being used in schools over a period of about five years. But when students buy the books directly, they use the digital book just for one year. They will also not be able to resell the used textbooks to other students, hence every year there is a new batch of students purchasing new books.
Of course, Apple will take a cut of each sale but in the end it might keep the margins where they are today, and the $14.95 is also dubbed as “pilot pricing” which keeps the door open to adjust later on.
Looking at the set of features textbooks that are authored through the newly launched iBook Author tool offer one might say that Apple got “inspired” by startups like Kno, Inkling, ScrollMotion and lately Chegg that had all introduced these features in their applications months ago. On the other hand, there is also not much room for innovation creating features for digital textbooks as they generally mimic the behavior of students using a physical textbook, e.g. highlighting, taking notes etc.
This whole event reminds me of what Osman Rashid told me in our interview back in October. Textbook publishers are still figuring out how to make a smooth transition into the digital space without canibalizing their core business which is until today still selling dead wood. Giving just a portion of the textbook market to Apple keeps the door open for other distribution partners who might come up with new ways to get the textbooks to the end users.
And then there is, of course, the fact that in the end Apple is not (yet) representing the entire hardware market. Sure, 1.5 million iPads used in education is a nice number but also just a fraction of the entire market. No one can be sure if there isn’t an Android based tablet just around the corner with the potential to conquer the education sector. And you can be pretty sure that Amazon and Google are working on that device right now.
Chegg for example launched its eTextbook Reader yesterday based on HTML5 which makes it compatible with all devices from PC to Android powered smart phones and the iPad. I think, it would also make sense for Kno to either create native Android apps or also join the HTML5 platform to get less hooked to the iOS ecosystem.
In the end, the big part missing at today’s announcement was the absence of a statement about getting more iPads into schools through special offers, reduced pricing etc.
But that may be part of an iPad 3 announcement as there have already been rumors pointing into the direction that the iPad 2 might indeed stay in the store like Apple did it with the iPhone product line before. A significantly cheaper iPad 2 with an extra $50 off for educational institutions could bring the price down to about $250 for the 16GB WiFi only model which would be just enough to hold an entire textbook set according to The Verge.
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