As The Global P.C Market Flattens And Revenue Streams Become Harder To Sustain, Education Becomes The Next Big Thing For I.T Hardware Manufactures.
Governments across the globe are realizing the benefits of having an IT-literate workforce, and technology being a teaching and learning tool. With nearly 1.4 billion enrolled students and teachers worldwide, this represents a significant opportunity to manufacturers, pointing the way to a future of PC and tablet-filled classrooms with content delivered over the cloud. That’s a far cry from satchels weighted down with textbooks. Consequently, governments are increasingly investing in classroom technology in order to support learning, as one-to-one learning programs develop and schools move away from traditional teaching methods.
Worldwide spend on IT hardware in education reached $9.5 billion in 2011, an 11 percent increase on 2010 despite the global economic slowdown — and by 2015 this figure is expected to double.
Global PC shipments into education exceeded 11 million units in 2011, with a significant amount of activity taking place in Central and South America. With strong expectations of multiple government tenders during 2012 and beyond, and as tablets grow in significance, Futuresource forecasts indicate large sales volumes across many territories with global shipments reaching close to 12 million units in 2013, rising to more than 40 million units by 2016. Though the installed base will still represent less than 8 percent global penetration, a number of countries will be close to saturation point. The majority of short-term growth will originate from nationwide projects in the Asia-Pac region, particularly Thailand and Korea.
U.S. Leads the Way
The U.S. is also expected to witness major growth in tablet sales — and at 13 percent student penetration, it currently leads the adoption of IT in education above many other developed countries including the U.K. (5%), France (3%) and Germany (0.3%), rising from around 200,000 in 2011 up to 2 million in 2015.
Adoption is expected to be driven by the availability of content and Apple’s announcement of iBooks 2, the e-textbook platform, as this provides content producers with an easier route to market. Publishing houses including Pearson, McGraw-Hill and Scholastic are also experimenting with digital content. By 2015, nearly one in four children in K-12 education across the U.S. will be using a school or district-funded mobile computing device in the classroom, equating to annual sales volumes of more than four million units.
EMEA experienced strong growth from 2007 through 2010, but limited planned rollouts failed to emerge in 2011 as a result of a difficult trading environment for the duration of the economic slowdown.
Interactive whiteboards (IWBs) have long been the main classroom display, with few affordable competing alternatives available to challenge their position. More recently, the landscape has begun to shift rapidly with IWB solutions coming under increasing pressure from new display products and suppliers. This pressure is further compounded by governments and educators increasingly searching for open-source software platforms. Key IWB vendors have tended to avoid this model, valuing the ability to lock in end-users to proprietary platforms to ensure strict license controls.
Major computer electronics manufacturers are extending their reach into the classroom display category, where IWBs have traditionally dominated. At present, the major flat-panel providers are offering the market a more expensive hardware solution with fixed-price, less compelling hardware, software and content platforms. The rigidity of such service offerings is opening up a lucrative market opportunity for “smart” displays where app development, allowing the deployment of cross-device interaction, could provide a clear added-value proposition to the end user. While the potential role for smart TV in education is relatively obvious in the classroom, there is also a potential usage model at home. Hand-held gaming devices have shown that “edutainment”- style content has a role in education and technical developments in smart TV such as gesture control, voice recognition, built in Skype and retina recognition could be utilized to suit learning objectives.
Interactive projectors have seen strong early adoption, though this success has largely been driven by entry-level positioning and pricing. Consequently, the value performance has been limited. The new technology has pushed powerful projection vendors into a head-to-head battle with IWB vendors, where once the relationship was far more symbiotic with projectors used in conjunction with IWB devices. Interactive projection vendors are also increasingly forming valuable relationships with education software vendors: a critical part of an interactive solution and an area in which IWB vendors have held a position of strength.
Dedicated single-function complementary devices such as voting systems will also come under pressure in the long term from tablets and other multifunctional devices. However, short- to mid-term sales of complementary devices are expected to hold, because few schools and universities can currently guarantee one-to-one device usage.
Similar to the consumer market, a battleground is emerging in the education sector over who can develop and own the content ecosystem. This includes hardware, interactivity, storage, content, the learning platform and associated elements. Those that develop a fully-integrated ecosystem across all elements will inevitably hold a distinct advantage over those without. Infrastructure is being developed with increased wireless connectivity in schools, while software apps and cloud computing are making it easier to manage PCs remotely, allow interactivity between mobile PCs and classroom displays and push-out content, supporting the multifunctional use of devices longer term.
Distance Learning Included
As more learning content becomes digitized and accessed via centralized content platforms, the opportunity exists to target the lucrative distance-learning and -tutoring market. The key to success could be in developing an industry standard content platform that can be used across a range of hardware devices. Apple has already demonstrated that suppliers who offer consistency across hardware, software and content are more likely to dominate the landscape in the future. The ability of suppliers to monetize the content and services part of the ecosystem will be critical, and the development of content partnerships and content platforms is likely to be a key factor in overall market leadership.
With a wide variety of suppliers targeting different elements of the education market, competition in the education sector is extremely fragmented. Until now, AV solutions providers, IT infrastructure and one-to-one learning solutions providers have operated separately. However, end users are already seeking to unify their digital learning structures and strategies, challenging suppliers to develop integrated solutions, greater product choice and a wider, more inclusive approach to channel and reseller relationships.
Looking at the funding models in education, economic wealth and size of a nation are low the list of factors determining market adoption, and influence comes from the support of government bodies. One of the nuances of the education sector is that countries operating a more centralized funding and decision-making model can often develop nationwide roll-out plans much easier than the U.S., where decisions are made at state or district level. As a result, Portugal, Uruguay, Venezuela and Argentina have all successfully implemented largescale central-government-managed PC deployments into schools.
Many large and financially established countries have concentrated on traditional teaching methods and, as a consequence, technology adoption in schools has remained relatively low. Areas to watch in 2012 include Turkey, Thailand and the Middle East where multi-billion dollar nationwide tenders are likely to be initiated. The continued penetration of the iPad in education will also be one to watch, and the potential launch of the educational Apple smart TV may be something to look for in the future.
—This article written by Mike Fisher, who is with Futuresource Consulting. Contact him via phone (+44-0-1582-500-155) or email (firstname.lastname@example.org)