Global K-12 Education Market Projected to Slow in 2016 as Poor Economic Conditions Hit Large Education Tenders

Global K-12 Education Market Analysis and Commentary




02 Jun 2016 - Futuresource Consulting is projecting a difficult year for the sales of personal computers into the K-12 education sector*, with the status of several large scale national tenders uncertain due to unstable economic conditions. This Futuresource K-12 report tracks global device sales and shows that 2015 saw strong double digit growth in shipments compared to 2014, the first quarter of the year fell by more than 15% to 4.8 million units compared to the same period in 2015 with the largest declines taking place in Latin America.

"Projects in Venezuela, Mexico and Argentina all slowed significantly during the first quarter, while those in Venezuela are under threat for the rest of the year due to the difficult economic conditions within the country caused by the fall in oil prices" commented Philip Maddocks, Market Analyst, Futuresource Consulting . "The outlook for the rest of the year also remains bleak, with a number of projects cancelled or postponed in Latin America, while in the rest of the world traditional large scale projects in Turkey and India also look unlikely to see activity during 2016."

The report looks at shipments at a local level, highlighting that within the US market, growth has also slowed following three years of exceptional sales which saw more than 26 million devices sold into the K-12 education sector. During the first quarter of 2016, shipments reached 2.04 million units which equated to 9.5% growth, year over year (YoY) during the first quarter, representing a slowdown from strong double digit growth of 2014/2015. Despite this slow down, both Chromebooks and Windows devices saw unit growth during the first quarter while Apple continued to see both Macbook and iPad volumes decline year-on-year.

In terms of market share, Chromebooks maintained their momentum during the first quarter, accounting for more than 50% of education sales in the USA during the first quarter, while Windows saw its share of the market decrease YoY within the USA to less than a quarter of all shipments. Qtr 2 and Qtr 3 are normally the peak buying periods and competition is expected to be intense. A large number of entry level sub $300 Windows devices launched on the market towards the end of Qtr 1 with the aim of directly competing with Chromebooks.

Globally Windows maintained its position as the dominant number one Operating System (OS) during the first quarter, gaining more than 6% share YoY to reach 46.1% of shipments. Windows has been gaining share against Android, especially in emerging markets and Chrome continues to sell predominantly in the US market, 90% of Chromebook sales remain in the US.

Major OS Providers Continue to Improve Their Education Ecosystems

During the first quarter of 2016 all of the major OS providers made significant changes to their respective education ecosystems, which further highlights the importance of the sector. Whilst the supply side of the industry continues to make technology advances at rapid pace, in many instances educators are being overwhelmed by the complex speed of development and the dizzying array of solutions and providers on the market. OS providers are seeking to add functionality to their offerings and bring simplicity to the market by ensuring smooth integration of various solutions.

"The OS battle for the education market is reaching a new level of complexity. Whilst device choice will remain a key battleground, developments in provider ecosystem will likely become the major talking point in the next twelve months. The fragmentation of the ed tech. ecosystem is confusing end users and leading to OS providers developing in house solutions. To date, most of these solutions have been designed to integrate and work with existing major third party solutions such as LMS, SIS, MDM etc. but, as the market evolves it is likely that we will see increasing overlap. It will be interesting to see how far this development goes and whether the major OS providers effectively start to compete with third parties as they seek to add value to their offering. We expect to see announcements regarding device management and data analytics solutions in the short to mid-term" continued Maddocks.

Microsoft has announced Classroom which brings Office 365's traditional applications such as Word, Excel, PowerPoint, and OneNote together in the context of the classroom while allowing for the organisation of class materials via OneNote Class Notebook. Another significant addition to its ecosystem is the introduction of School Data Sync (SDS), which allows Microsoft Classroom to integrate with traditional school Student Information Systems (SIS), simplifying the process of creating classroom groups.

Google announced at its annual Google I/O conference that it is bringing Android applications to the Chromebook platform. This will see a wealth of previously unavailable applications available on Chromebooks which will also add to its offline capabilities. Unlike the traditional web browser experience, Android applications will be able to be downloaded directly to the device and ran offline. It also adds a to the touch functionality of Chromebooks which is something that Google has been working to improve as more of its OEM partners begin to release touch based Chromebooks using new form factors such as the convertible 2-in-1 form factor. This functionality is expected to be widely available towards the end of 2016.

Apple made significant changes to the iOS platform with its announcement of iOS 9.3 which bought several education specific features such as allowing for the sharing of devices across several students, a classroom application which will provide in class control of devices, and managed Apple IDs which can be created in bulk and managed by the school district. Apple also announced the acquisition of LearnSprout, a San Francisco based education analytics start-up. The LearnSprout platform collects real time information from student information systems (SIS) and creates dashboards which can show a variety of statistics on student performance.


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 a installed based data point. (For example this statement is incorrect - Chromebooks account for 50% of devices in US classroom.)

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Notes
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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