iBooks Textbooks: Apple's New Billion-Dollar Business

NEWS ANALYSIS: Apple is making a calculated, and possibly very lucrative, move into the education market with iBooks 2, iBooks Author, iBooks textbooks and iTunes U app. Will Google and Microsoft follow suit?

In the United States, there are 55.5 million kids in K-12 and another 11.5 million students in two-year or four-year colleges, according to statistics from the U.S. Census Bureau. With an average of four textbooks per student, that's close to 67 million textbooks sold a year. At an average of $25 per book, that's a nice $2 billion a year market. For more than 100 years, textbooks have all been printed on paper and have all been "static"-what you see is what you get. No animation. No embedded video. No way to interactively test and check your answers.

Then, in 2009, Apple launched the iPad. The company has sold more than 30 million of them, with about 1.5 million of these tablets finding their way into the education market. The first textbooks that came out on the iPad were simply digital versions of same "static" textbooks. The only real advantage was that the digital textbooks weighed less than printed ones.

To become more valuable in the education system, digital textbooks have to migrate from "static" to "active," in which authors embed animation to show, for example, factoring in algebra or a video to explain the solar system.

Some attempts to create "active" educational materials have been made online, but access has always been limited to what was available in the classroom. Many students (actually millions of them) didn't have-and still don't have-easy access to such active content online when away from school or at home.

Apple felt there should be a better way.

The company created iBooks Author, a free application that helps K-12 and college textbook authors and publishers create textbooks that Apple calls dynamic, engaging and truly interactive.

This is what we call "active" environments, where rich media can make the learning process better by engaging students in the subject, explaining it better, and testing and correcting them as they learn. iBooks Author enables textbook authors to update their work on the fly so that the latest improvements are immediately available.

And, through iBooks textbooks-the material that's distributed through iBooks-textbook authors stand to reap better financial return than they did when printing books. Oh yes, Apple gets 30 percent share of the revenue for helping create a very nice walled garden-one that provides value to the teacher, to the student and to the educational system. But, it's still a walled garden.