Apple Set To Dive Deeper Into The Digital Textbook Market

Date : 01/19/2012 @ 11:38AM
Source : Dow Jones News
Stock : Pearson, (PSO)
Quote : 9.1  0.08 (0.89%) @ 4:05PM

Apple Set To Dive Deeper Into The Digital Textbook Market

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Apple Inc. (AAPL) is expected Thursday to introduce tools that would help build digital textbooks for devices like the iPad, the latest push by the company to drive demand for its tablet and change the education market.

"Education is deep in our DNA," said Philip Schiller, Apple's senior vice president of world-wide marketing, at an event Thursday at the Guggenheim Museum in New York. Schiller noted that education institutions already use more than 1.5 million iPads and have access to more than 20,000 education apps.

At the event, Schiller unveiled iBooks 2, a new textbook experience for iPad. "These are beautiful books. Interactive, gorgeous, fun, engaging. Kids are really going to love to learn with textbooks in iBooks."

Apple's push into textbooks is an attempt by the Cupertino, Calif., electronics company to change the type of educational content that exists on the market. It also underscores the importance for tech companies to spur the creation of digital content for their software or devices.

The digital textbook market is young but growing. Only about 6% of education-textbook sales will be digital this year, up from 3% in 2011, according to textbook distributor MBS Direct Digital, but that number is expected to rise to more than 50% by 2020.

As a result, the market already is crowded but has been slow to evolve. Companies like CourseSmart, Kno and Inkling offer tens of thousands of digital textbook titles, with other publishers and education companies working on digitizing content. In addition, Kindle maker Inc. AMZN) has been pursuing the market.

"Finally a mainstream company like Apple is turning its attention to the huge problem of actually reinventing the book," said Matt MacInnis, chief executive of Inkling, in an interview before the event. MacInnis, a former Apple employee, started Inkling after noticing students considered technology and textbooks to be rivals.

"By focusing everyone's attention on this issue, we're going to hopefully reach a new understanding of what it means to be digital," he added.

McGraw-Hill Cos. (MHP), Pearson PLC (PSO, PSON.LN) and Houghton Mifflin Harcourt are among the education-publishing companies most likely affected by an Apple textbook announcement. The companies have experimented with interactive approaches, such as allowing students to take quizzes as they read and hear audio for foreign-language study, but many digital textbooks have looked a lot like their physical counterparts.

Apple already has made a push into book publishing, launching its iBookstore. And the company has long been active in the education market, with its products used in many classrooms and by offering discounts to teachers and students. It also provides lectures, lessons and other educational content through its iTunes U.

While its existing education offerings have been niche, its iBooks platform, which already contains a small number of textbooks, could help it gain scale--if more schools are willing to buy Apple devices.

Apple's textbook plans could spur more interest in the iPad, which already is one of Apple's best-selling products. The company currently dominates the tablet market--holding more than 70% market share, according to tech research firm Gartner Inc.--but the iPad is facing increasing competition from Google Inc. (GOOG) Android devices and an eventual Windows 8 release from Microsoft Corp. (MSFT).

The company's new initiative follows up on the ambitions of its late co-founder, Steve Jobs, who had long aimed to reform education with technology. More recently, Jobs had set his sights on the textbook market, envisioning lowering the cost of textbooks by distributing them on the iPad, according to people familiar with the matter.

The event Thursday is the first hosted by the company since Jobs died in October. Apple typically holds launches closer to home in Silicon Valley, but New York is viewed as the hub for many major publishers.

Apple shares, which earlier Thursday crossed $400 billion in total market value for the first time, recently slid 10 cents to $429.01.

-By Shara Tibken, Dow Jones Newswires; 212-416-2189;

--Jessica E. Vascellaro contributed to this report.

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