F@tih is an undertaking that, if successful, could lead other nations — both richer and poorer — to follow Turkey’s lead. There are already numerous programs modernizing technology with tablets, but if Turkey can prove that their widespread use improves education and saves costs in other areas, it could accelerate large-scale deployments like the one being conducted across the country.
There’s a lot at stake here.
The future of tablet growth?
The news of Turkey’s impending tablet purchases was big news across Apple Inc. (NASDAQ:AAPL) sites last week, because Turkish President Abdullah Gul met with Apple VP of Education John Couch. The size of a potential deal between the Turkish government and Apple has been reported at $4.5 billion.
Apple’s size — $165 billion in sales in the past 12 months — doesn’t make any potential deal in and of itself a game-changer. Yet the basic premise of a deal with Turkey is tremendously powerful. Steve Jobs conceived the iPad as something revolutionary to education, so that in one fell swoop Apple could put itself at the center of a case study in using tablets to revolutionize education.
That’s a potentially massive market. The huge growth areas for the iPad were that beyond its obvious placement with consumers — a place Apple has always found higher levels of success — it could also make deep inroads into business and education. Becoming the de facto platform for education in different countries creates a large install base. That not only creates more sales from the educational iPads, but it also increases the odds that users will have more than one iPad device. That is, if someone has a school or work iPad, there’s a good use case for also having one at home that stores more personal media and apps.
If tablets were purely a consumer phenomenon, you could see them at their peak with an attach rate of maybe one tablet per person. However, if tablets are huge in business and education as well, it not only drives familiarity with iOS as a mobile operating system, but it could also mean something like 1.5 tablets per person, as a good amount of the population has a personal and work or school tablet.
Not Apple’s contract to win?
The elephant in the room is that Turkey’s tablet contract isn’t necessarily Apple’s to win. The bottom line is that Apple will be more expensive than competing offerings. Turkish website Sabah reported on the costs Turkey paid for its pilot program providing tablets in the classroom:
PRIORITIES WERE A STRONG MEMORY AND RESISTANT GLASS: The pilot stage for the tablets was conducted with Samsung and General Mobile via the State Materials Office. For every 4,800 tablets purchased from Samsung, each one cost 775 TL. For every 4,000 tablets purchased by General Mobile, each cost 599 TL. For every smart board purchased from Vestel, 3,990 TL will be paid out.
The currency conversion is one TL, or Turkish lira, to 0.57 U.S. dollars. That means Turkey paid about $441 per Samsung tablet. That’s a range Apple could be competitive in. The General Mobile tablet would cost about $341 per unit. That’s a range closer to where the lowest-end iPad Mini sits.
