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Futuresource Consulting, the specialist research and consulting company, is delighted to be the official knowledge partner for CEATEC JAPAN. The company can trace its roots back to the 1980s and provides market insights into consumer electronics, digital imaging, entertainment media, broadcast, optical manufacturing, storage media, professional IT and education technology.
With more than 70 full-time employees providing in-depth analysis and forecasts across consumer and professional electronics categories, Futuresource is able to advise on market, competitive and technological developments, providing clients with access to the information that helps produce the best possible results.

Vol.1502017/12/31

Mobile PC Sales in to US K-12 Education Starting to Slow as the Market Looks Towards Replacement Cycles

06 Dec 2017 - Following multiple years of strong double-digit growth, the market for Mobile PCs* into the US K-12 education sector is showing signs of maturity, as penetration is starting to reach relatively high levels. Quarter three saw market volumes grow just 3.5% year-on-year. Annually, 2017 is expected to see a total growth of 9%, down from 19% in 2016. By the end of 2017, penetration of the student/teacher population will have reached over 50% (the highest in leading international markets) with an increasing proportion of sales servicing replacement demand.

The OS Battle - Will The Replacement Cycle Change Dynamics?

The competitive battle between iOS, Chrome OS and Windows remains fierce. The growth of Chromebooks in US education has certainly been a major headache for Apple and Microsoft. At a time when the move to online assessment was a primary driver for adoption, Google presented a straight forward and well marketed proposition of entry level devices, management software and collaboration tools; creating a compelling and low-cost solution to meet the productivity needs of digital classrooms. Chrome OS subsequently stormed the market, accounting for over 50% of devices shipped in 2016. As worrying for its competitors, the education market is providing Google with a launch pad for growth into the larger and more lucrative commercial and retail markets.

In response to rising Chrome OS adoption, both Microsoft and Apple have made major education focused investments in the past couple of years. Microsoft has developed its solutions ecosystem, including the launch of Microsoft Teams for collaboration, InTune for device management, Windows 10S and a number of new licensing packages. In addition, a large number of education specific, sub $300 Windows based devices have entered the market and are having an impact. Apple meanwhile has introduced the Classroom app, Swift Playgrounds coding solution and major education focused functionality updates to iOS, including the ability to share iPads and improved device management solutions.

Whilst Google remains the dominant market leader, its growth shows signs of slowing. Apple launched its new (lower cost) iPad in Q2, which had an immediate impact with extremely strong sales. Q3 saw the slowest Chromebook growth yet, with volumes only growing 3% year-on-year and there are signs that Microsoft's momentum is building again, with Windows devices gaining share in Q3.

It is anticipated that many Chromebooks deployed during 2014/15 will be due for replacement in 2018. With both Microsoft and Apple developing compelling alternatives to the Google product suite, can these companies convert Chrome OS users to their environments? To answer this question, the market will be keenly watching the OS decisions of school districts refreshing investments. Trends here will likely frame discussions around the competitive landscape moving forwards.

Mike Fisher, Associate Director at Futuresource Consulting says, "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. Q3 2017 was the first time we saw and heard about a slight shifting of the competitive scenario in the US, with many OEMs and major channel players reporting faster growth (and expected growth) on Windows than Chrome based devices. The challenge now for Microsoft will be how to accelerate this trend in 2018. The majority of market demand is expected to be replacement demand; convincing existing Chrome users to completely change the existing ecosystem will likely not be easy due to the time and cost involved."