The decision is a blow to Apple, which had hoped at one point the massive contract would be catalyst for its efforts to convince more school districts to embrace the tablet. Instead, the program has become a cautionary tale about the challenges schools face when adopting new technologies.
It’s hard to calculate just how much money Apple will lose as a result of the decision. Originally, the LA schools announced plans in 2013 to buy 644,000 iPads, one for every student. As of last month, the district had only purchased 91,000 iPads, according to the Los Angeles Times.
The $1.3 billion program included $800 million for new personnel. The remaining $500 million was supposed to fund the purchase of iPads from Apple as well as software from Pearson, a London-based education company.
For Apple, any lost revenue under $500 million is basically a rounding error. However, Apple already is struggling with slowing sales of the iPad, and missing out on a sale of another 553,000 units over the next year won’t help reverse that momentum.
Beyond that, the LA schools’ program had a high symbolic value for Apple. For a company that rarely announces new partners or customer contracts, Apple issued a press release last year trumpeting the unanimous vote by the school district to launch the initiative.
“Education is in Apple’s DNA and we’re thrilled to work with Los Angeles Unified public schools on this major initiative as they plan to roll out iPads to every student across 47 campuses this fall,” said Philip Schiller, Apple’s senior vice president of worldwide marketing, in the press release. “Schools around the world have embraced the engaging and interactive quality of iPad with nearly 10 million iPads already in schools today.”
Apple chief executive Tim Cook also highlighted the contract in a subsequent call with analysts who were raising questions in the summer of 2013 about slowing iPad sales.
“We feel really good about where we are,” Cook said. “We’re really happy to be selected for the first phase of 660,000 unit roll out at LA Unified and really bold move they are making to change teaching and learning.”
The LA schools, meanwhile, are now looking at mounting legal costs to deal with the fallout. The iPad roll out faced problems almost immediately as students disabled security features and most teachers opted not to use the pricey educational software.
Subsequently, questions have been raised about whether the previous superintendent who pushed for the adoption of the program had close ties with Apple and Pearson. According to the Los Angeles Times, the school district had to turn over 20 boxes of documents yesterday as part of a federal grand jury subpoena.