Apple launches low-cost iPad for education, targeting Google

Apple Inc on Tuesday kicked off an event in Chicago where it announced a new iPad that would work with its Apple Pencil accessory aimed at helping it grab more of the US education market.

The tablet will have a starting price of $299 for students and $329 for consumers. Tech companies are battling for dominance in US schools with inexpensive devices and laptops that are geared towards classroom use and seen as a way to hook young consumers.

Education-geared laptops running operating systems by Alphabet Inc's Google or Microsoft Corp can be had for less than $200.

Apple hit hard on the education theme on Tuesday, with school bells and announcements over a public address system directing press and teachers into an auditorium at Lane Tech College Prep High School. Apple board member and former US Vice President Al Gore mingled with the crowd.

Apple Chief Executive Tim Cook opened the keynote with a nod to politics, saying "we are deeply inspired by the courage of the students who walked out" and marched on Washington, advocating for stricter gun control laws following a school shooting in Florida. The line elicited loud cheers from students seated at the rear of the auditorium.

The Chicago event comes during a spring buying season when many schools are making purchasing decisions for the upcoming school year.

Apple executives said the company will release a iPad model that works with its Apple Pencil accessory and features an upgraded A10 Fusion chip, the same CPU that powers the iPhone 7. The company also released a new version of its word processing apps for the iPad designed to work with the pencil and allow students to take handwritten notes more easily.

Apple made up just 17 percent of the K-12 U.S. educational market in the third quarter, according to data from Futuresource Consulting. Meanwhile 60 percent of mobile computing shipments to schools ran Google's Chrome operating system, and 22 percent had Windows.

Chromebooks sold by Dell Technologies Inc can be had for as little as $189. Microsoft last year introduced an education-focused laptop from partner Lenovo Group Ltd running Window 10 S.

Apple in recent years made changes to its operating system so that more than one student can log into an iPad, and to its software to let teachers better manage groups of students.

But it faces a tough battle in the educational market given the popularity of Google and Microsoft's cloud-based productivity suites, said Carolina Milanesi of Creative Strategies. Google's G Suite fuelled Chromebook sales because it was seen as easy to use to manage assignments.

"Most teachers don't look past G Suite for education," she said. Apple has iWork, which added features in recent years but remains less familiar to teachers than Google's productivity suite or Microsoft's Office.

Education sales for iPads rose 32 percent to more than 1 million units in Apple's fiscal third quarter. Sales of iPads made up just 8.3 percent of Apple's $229.2 billion total revenue last year, however, compared with the nearly 62 percent of sales generated by iPhones.

Apple needs to keep working to regain market share in schools to get children interested in its devices later on, said TECHnalysis Research founder Bob O'Donnell.

"It's more about the psychology of driving long-term preference for the (Apple) platform. It's more strategic than financial," he said.

(Reporting by Stephen Nellis; Editing by Meredith Mazzilli)