Microsoft’s Surface Promotion Signals the Growing Importance of Tablets in Chinese Schools

Microsoft recently announced an education promotion for its Surface RT tablets that offers deep discounts to schools and universities.  Under the program, Microsoft will offer Chinese students the 10.6” Surface RT tablet at $199 (versus a list price of $499), with official Office applications standard.  With e-education a critical part of education reform, Forrester sees two key trends driving strong tablet adoption in the education sector:

·       Continuous government investments in e-learning.  At both the central and local government levels, e-learning programs are underway to improve students’ information literacy as well as narrow the education resource gaps across the different regions in China.  For example, the “Digital Education Resources Full Coverage Project" was launched in November 2012 by the central government with funding of RMB 308 million ($49 million) to equip digital education devices for teaching venues across China.

·       Explosive growth in tablet adoption.Forrester forecasts the number of tablets for business, government or educational use to increase from about 19 million in 2012 to more than 83 million in 2016 in APJ, with China as one of the key growth engines. Noticing this growing opportunity, multiple city governments (e.g. Beijing, Shanghai, Nanjing, Guangzhou, etc.) have announced projects to purchase tablets for students’ usage in class.

In China, this particular promotion will be delivered through Microsoft partner Digital China, which also became an Apple iPad value-added reseller about 6 months ago.  Competition in the education market will definitely become fiercer; however, I expect to see the content, technical support and management of these devices as the core battleground. 

As our clients in the government and education sectors consider the major players for implementations, we believe they need to clearly see the gaps for all of the major players and OS platforms:

·       Apple’s local education content needs to be strengthened. Apple has successfully trialed its iPad learning solutions in some top schools in several tier 1 and 2 cities, with dedicated technical support offered to education customers.  However, it still lacks sufficient content partners in China to develop specific content or interactive textbook materials for Chinese students.   

·       Android OEM’s education focus is very low.  With the fragmented Android tablet market, we have not seen any major players (including Samsung) with substantial plans to address the Chinese education market.  Considering its lack of focus on this market, we do not anticipate any major developments from education customers in the short term.

·       Google is unable to tap China’s education sector on its own.Google has been aggressively targeting the education sector globally through free Google Apps licenses to education customers, including a large number in Hong Kong and Taiwan.  However, this channel is closed to Google in China due to its lack of presence and the Chinese government’s blockage of Google services in the country.

·       Microsoft can leverage its mature ecosystem, but it is still a work in progress. Microsoft has the largest ISV partner ecosystem in China, including many in the education sector on the Windows platform.  As a new entrant in the tablet space, Microsoft still needs to invest substantial effort working with partners to migrate existing interactive learning applications from PCs to tablet-focused applications.  With free Office 365 bundles on the Surface RT, Microsoft solutions have a leg up with Chinese customers while Google Apps are not available in China.

The usage of tablets for education in China is still at a nascent stage, but we expect to see rapid increases in adoption over the next three years.  As major players increasingly target this space, competition will pick up and we believe governments and schools will be able to source excellent deals.  However, successful implementations will depend on content and management tools more than the devices themselves.  We believe this is where China’s educators should focus when considering investments in tablets.