No EDUdiscount on TV?


[There was some wonderment on the Intertubes at recently at the lack of an EDUdiscount for the TV. I posted this in the comments for that article.]

To understand the educational discount, consider its real purpose: it is designed to “grow” a lifelong consumer of Apple products. It is not designed to saturate a market; it is not designed to make educational institutions happy; it is not designed to make a profit, even. It’s purpose is to get lifelong mindshare which leads to marketshare.

In fact, and I wish I could find the source for my thinking here, the original Mac was priced significantly lower in the educational market than in the retail market for the specific purpose of growing Mac users. (Sidenote: We got our first Mac in 1984 through the educational purchase program as my dad was a professor at a major university. The unintentional side effect that Steve didn’t plan on at the time was that he got mindshare for the professor’s kids!)

Now, consider today’s educational landscape and ask the question, What does Apple gain by offering a discount on the TV? Does it build mindshare among college students? Maybe, but not likely—that market penetration is already there with the iPod. Does it create purchases at the iTMS? “Poor” college students buying anything if it’s not incredibly cheap or free? I doubt it. Creating a halo-purchased Mac? I’d have to guess that that decision is more likely to be influenced by the college and its push or mandate for one platform or the other, something that really does happen, or by the parents paying the bills, something that also really does happen. Also, the TV is more likely to be an accessory to that computer than the iPod is. And, without a software investment to preserve, there’s no reason that the college student won’t buy a Slingbox after graduation because, as I hypothesized before, there won’t be much legal content that needs to be preserved on the replacement Slingbox.

Compare that question to, What does Apple gain by offering a discount on the Macintosh? Does it build mindshare among college students? Absolutely. Does it create future purchases? Absolutely—wouldn’t want to waste all that software, after all. Is there something to be gained by offering an EDUdiscount on the Mac? You betcha’.

Another poster hypothesized that the TV was probably being sold at razor-thin margins and that would preclude offering any kind of discount. I somehow doubt that the profit margins on this item are that thin and offer the (Product)red iPod as an example of an item where Apple gives away margin (5% or 4%, model-dependent). And there is no educational discount for this item—or any other iPod, by the way. I’d venture a guess that Apple just feels that it doesn’t buy them anything to give an educational discount, whereas it buys them positive public opinion to give a “feel good” discount with the (Product) red iPod.

[At one point, Apple did EDUdiscount iPods, but that discount appears to have disappeared completely. I might be missing something, though.]

OK, so let’s look at the discount (or lack thereof) from another viewpoint: Does the lack of an EDU discount necessarily hurt the EDU community?

For the most part, I’d have to say that the answer is probably “No.” Consider the various segments of that market. First, there are the institutions themselves, and that’s primarily divided into two segments, the K-12 and the college/university/etc. markets. Then there are the personal participants in each community, namely the students, faculty and staff of each market. I’ll call them “EDUsumers.”

Now, one can certainly argue that the college/university market doesn’t deserve much of a discount seeing as how these institutions are businesses—non-profit, in most cases, but businesses nonetheless—and how they charge their customers (students) based on their costs. As tuitions have been on the rise faster than the CPI and other indicators, one might argue that they have even been a bit greedy, unwisely managed, or something sinister like that, and can certainly afford the gosh-darned hardware that they want or need.

You might also argue that the K-12 market deserves a discount as these institutions are solely funded by the taxpayer’s dollar (public schools are, anyway) and are severely underfunded and need the discount to implement Apple-centric product solutions for their technology needs.

But both of these arguments are moot. If you look at the the Apple Store for Education routing page, you discover that institutions are treated differently and separately from the EDUsumer. And unless you are able to and can go forward with creating a purchase proposal for one, ten, or 100 TVs and let the details drip into the Intertubes, we will not be able to find out if there’s a discount being offered to the institution. That is, we have no way to tell what Apple’s got up its sleeve for a public school, private school, or university or college.

Meanwhile, the EDUsumer, student and teacher alike, on the left side of the page doesn’t get the TV discount. Perhaps the most-hurt by this is the school teacher whose salary is woefully inadequate and the least hurt is the student with a trust fund and plenty of disposable income. But like I said before, it’s unlikely that Apple feels the need to discount in order to drive a sale because, well, if you want it, you will find a way to afford it. It’s a luxury item, not a tool (like a Mac), and you’re going to have to pay for it.

Interestingly, MacOS X Server used to be available for EDUsumer purchase—and it is no more. Here, I’d guess that Apple doesn’t see the need to sell an item at a discount that would be of marginal usefulness to the EDUsumer, would cost them support costs, and would eat some profit. In other words, Apple is definitely paying attention to what it offers at a discount and to whom. That it has decided not to discount the TV to the EDUsumer is a little surprising, but certainly was not a decision made lightly.

I have no doubt that Apple is well aware of what they’re doing and why they’re doing it.

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