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The US K-12 Education Market Beats Forecast in Q3, But Stock Issues Spell Uncertainty for Next Year

K-12 Mobile PC Market Research, Analysis and Commentary

05 Dec 2018 - Sales of Mobile PCs* into the US K-12 market increased in the third quarter of 2018, with shipments growing 10% year-on-year. This follows growth of only 3% in Q2. With the penetration of mobile PC devices used by US teachers and students above 50%, the market has shown sign of slowing this year. “The Q3 number was boosted by strong refresh, particularly some large school districts in Eastern states,” said Ben Davis, Senior Market Analyst at Futuresource.

US growth was set against a backdrop of mixed performance globally. The majority of Western markets continued to perform well, with many posting double digit growth year-on-year. Markets in emerging regions report mixed fortunes, with delays to major projects in Argentina and India, amongst others. Globally, shipments of mobile PC devices to K-12 education reached 8.1 million units, a -8% decline year-on-year. This down turn is expected to be a short-term trend, with several sizeable projects expected to ship later in 2018 and into 2019.

Growth in the education market has brought with it increased competition between OS suppliers and manufacturers. With budgets an ongoing concern in education, competition has increasingly centred on the low end of the market with both Microsoft and Apple promoting sub $300 solutions to compete with low cost Chromebook alternatives. This competition is seen most keenly in the US market, where shipments of sub $300 devices accounted for 75% of volumes in Q3 2018, up from 72% in Q3 2017.

Looking to next year, broader growth in the PC market has placed pressure on the supply of processors, with leading semi-conductor manufacturer Intel warning of significant supply constraints effecting CPU’s commonly used in PC’s. This supply constraint is expected to be felt most keenly in the low end of its business, where Celeron chips are a staple for devices selling to the education market. With a growing proportion of K-12 education customers buying low cost Celeron solutions the Intel supply constraint poses substantial uncertainty for both schools and manufacturers. Seeking to mitigate this, a range of new education devices using Intel alternatives are expected to launch early next year, with Intel competitors including AMD and MediaTek expected to gain share. Apple, which has struggled in the US market as of late, may also see some benefit with it’s ARM based iPad solutions, which are unaffected by the shortage. Schools looking to stay on an Intel platform may be forced to look to the higher end of the market, where supply constraints on Core Intel products are expected to be less severe.

Despite supply side uncertainty, demand for PC devices in the education market is forecast to continue to rise in 2019, with a growing number of countries globally providing government funding and directives for EdTech investment in schools.

*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.

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