Continued growth in the education sector comes at a time when PC & tablet sales in enterprise and retail markets are stagnating. With the education vertical offering growth opportunities to both PC OEMs and the major OS providers, competition in the sector is intensifying.
This competition is most evident when evaluating the strategies of the three major Operating System providers, Apple, Google and Microsoft. With the first half of 2018 hosting a key portion of the education buying season, a review of Futuresource data highlights some interesting trends:
The US market remains by far the largest market for mobile PC devices in education globally. The market here is maturing with penetration above 50%, with many customers now entering the replacement cycle. As such, market growth and changes in OS share are stabilising. Comparing the first half of 2018 with that of 2017, both Chrome and Windows OS grew their share by 0.7% and 0.4% respectively at the expense of iOS and Android.
Competition in the sub $300 market segment continues to rise. In response to strong adoption of Chromebooks in the all-important US market, 2017 saw both Apple and Microsoft positioning sub $300 solutions for education. In the US market, the segment accounted for 68.5% in 2017. Microsoft, especially, has been working hard to close the price gap between Windows and Chromebook by promoting partner devices on the Windows platform, priced as low as $189. Globally, Windows share in sub $300 category grew by 11% year-on-year in Q2 2018, with shipments of Windows devices in the category growing 75%.
Whilst 89% 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. Shipments of Chromebooks servicing schools in the European market grew more than 50% year-on-year during Q2 2018. In addition, Chrome OS is gaining traction in the Latin American market, with Mexico and Brazil as early adopters; despite this trend towards growth, the Windows platform retains a majority share of sales to schools in all key regions outside of North America.
Apples’ introduction of a $299 iPad for education in 2017 helped reinvigorate demand for the product in US schools, with 2017 sales growing following consecutive years of decline. In 2018, the tablet form factor faces increasing competition from '2-in-1' that offer an integrated keyboard, rotatable hinge and touch screen. Shipments of convertible devices to the K-12 education segment globally grew over 65% year-on-year during Q2 2018.
Outside of the US market, market conditions are proving to be very mixed. The rest of world (World excluding US) market reached 4.1 million units in Q2, a 6.4% year-on-year growth. Most of this growth can be attributed to large scale national projects in Latin America and Middle East and Africa regions.
Demand for computing solutions in K-12 education is forecast to grow throughout 2018 and into 2019. While developed countries continue to offer stable growth opportunities, large projects in emerging territories are often delayed or cancelled. "Projects in Venezuela and Argentina slowed significantly during the second quarter of 2018, while those in Venezuela are under threat for the rest of the year due to the difficult socio-economic conditions within the country," commented Mariia Konovalova, Market Analyst at Futuresource Consulting. "On the contrary, the EMEA region is expected to see strong performance from its key markets including Sweden, Benelux and the UK."
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