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SALES OF MOBILE PCS INTO THE US K-12 EDUCATION MARKET CONTINUE TO GROW, AS OS BATTLE HEATS UP
02 Mar 2017 - Sales of Mobile PCs* into the US K-12 sector continued to develop in 2016, with annual shipments growing 18% year-on-year in 2016, reaching 12.6 million units, up from 10.7 million in 2015. Districts continue to expand their 1:1 learning programs and a strong replacement market is developing. The outlook for 2017 is also positive with market shipment growth forecast to remain in double figures. This continued growth in the education sector, when considered against overall declines in PC & Tablet sales in total business and consumer markets, highlights why PC OEMs and the major OS providers are focusing so hard on the education market.
The OS Battle Rages On
At an operating system level, Chromebooks continue to gain market share, reaching 58% in 2016, up from 50% in 2015. The strong combination of affordable devices, productivity tools via G-Suite, easy integration with third party platforms/tools, task management/distribution via Google Classroom and easy device management remains extremely popular with US teachers and IT buyers alike. The rise of Chromebooks has also set new industry benchmarks with regards to average device pricing, with prices reaching as low as $120 on certain projects.
Whilst the growth of Chromebooks has certainly been a major headache for Apple and Microsoft, they are not standing still. Both made major developments through 2016, Apple announcing the 'Classroom' app and major education focused functionality updates on iOS 9.3, including the ability to share iPads. Microsoft has also had a suite of ecosystem developments, including the launch of 'Microsoft Classroom', 'School Data sSync' and a large number of integrations with popular third party solutions. More recently, Microsoft and partners announced a suite of Windows 10 based devices targeting the sub $300 price point (devices designed to compete directly with Chromebooks), at the BETT show in London in January. Microsoft specifically announced partner devices that would price at $189 highlighting how Microsoft has been working hard to ensure the price advantages traditionally seen by Chromebooks will be limited or negligible. In addition, Microsoft has moved to close a significant benefit of Chromebooks, the central, cloud-based device management platform. Microsoft has announced 'InTune' for Education, a tool that effectively replicates the Google Management Console and allows IT admins to easily provision and set up large numbers of student devices remotely. It is also identically priced at $30 per device.
"Microsoft has made huge strides in developing its education ecosystem offering in the past year, with major announcements on both the devices and platform side. To date however, these developments have not stopped Google's momentum within the US K-12 market. Microsoft continues to face challenges to win back end-user mindshare. Chromebook users and administrators continually refer to the simplicity and ease of use of the platform. With rumours swirling in the technology press (not confirmed by Microsoft) about a potential new OS offering 'Cloud OS', a stripped back, simplified OS, designed specifically for cloud with education in mind, would "square the dots" on other recent moves Microsoft has made in education (in particular launching $189 devices)," comments Mike Fisher, Associate Director of Education at Futuresource Consulting.
2-in-1 Devices Set to be the Next Must Have Device
It is the area of '2-in-1' devices (devices that can be utilised both as tablets and with an integrated keyboard for productivity applications) that are expected to be the major competitive area in 2017. Both Microsoft and Google (and their respective partners) have announced a wide range of 2-in-1 products designed specifically for education and are expected to sell for under $300. The 2-in-1 form factor is ideal for education, providing schools with flexibility in usage. In addition, the technology behind stylus/pen usage has developed rapidly and 'inking' is expected to become widespread and add value to device usage.
Fisher adds, "PC provider's laser focus on the education sector is good news for schools and students. 2017 will see wide ranges of computing devices, designed specifically for education and at competitive price points, entering the market and vying to be the device of choice for learning."
International Market Developments
Outside of the US market, market conditions are proving to be very mixed. The rest of world (World excluding US) market reached 13.6 million units in 2016, a 26% year-on-year decline. The majority of this decline can be attributed to large scale national projects that did not take place in 2016. Latin America has traditionally seen large scale national deployments of mobile PCs but economic issues caused by low oil revenues and fluctuating exchange rates have heavily impacted budgets in 2016. There are a number of 'hot spots' around the globe, including China, Scandinavian and Benelux, which are all showing strong growth. The outlook for 2017 is much more positive however with volumes forecast to reach 15.8 million globally.
At an OS level, Microsoft remains a dominant market leader with a strong position in both developed and emerging markets. Microsoft has been gaining share against Android, especially in large scale emerging market deals. Whilst 90% of Chromebook global sales remain in the US, Chromebook international sales are steadily increasing in certain territories. In Northern Europe particularly, Chromebooks have been consistently gaining share and 2016 saw Chromebooks gain the #1 spot in Sweden (the first country outside of the US).
Report Coverage and Definitions
*Data included as part of report – K-12 market only, institutional sales not including 'Bring your Own'. Mobile devices only, (Notebook/Mac, Netbook, Tablet, Chromebook) not including Desktops.
Please note, the term 'device shipments' refers to sales of devices at a certain point in time. It is not and should not be used as an installed based data point. (For example this statement is incorrect - Chromebooks account for 58% of devices in US classroom.)
If you are interested in finding out more regarding the latest Futuresource Ed Tech, K-12 reports then please do get in touch.
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Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com
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