New Tech Consortium Research Probes iPad Pricing for School Districts

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A new nonprofit organization has set out to help districts compare the prices they pay for education technology and examine the fairness and logic of procurement practices and contracts with vendors.

That organization, the Technology for Education Consortium, has come out of the gate with an ambitious project–having released data that questions the prices that Apple is charging districts for a popular model of iPads.

The consortium says its research, based on surveys of 40 districts, shows that the prices those systems paid for iPads with the same features and design ranged from $367 to $499. That gap can’t be explained by the volume of the purchases or related factors, the organization argues.

The consortium’s evaluation of iPads is the first study it has conducted and released publicly. It chose a big venue to unveil its data: the South by Southwest Education conference, an annual event held in Austin, Texas, last week that drew digital providers and educators from around the country. (The consortium released a table to Marketplace K-12 summarizing its findings.)

The consortium’s data is aggregated among districts, and the names and prices paid by the individual school systems were not released.

Apple responded to the consortium’s data by saying that without having more details on the prices paid by specific districts, it can’t know if the pricing information is accurate, or skewed by unknown factors.

The consortium will soon produce other evaluations of ed-tech pricing, including a study of what districts are paying for Chromebooks, said Hal Friedlander, the consortium’s CEO and co-founder.

Friedlander is a former chief information officer for the New York City Schools, the nation’s largest school district. Harold Levy, the city’s former school chancellor, is the chairman of the board of the consortium, which has received initial funding from the Bill & Melinda Gates Foundation.

“Every year American K-12 schools spend billions of dollars on education technology,” the organization says on its website. “Until now, they didn’t have the tools to know if that money was being spent effectively.”

The consortium intends to fill that void by collecting data from individual districts about its ed-tech purchases, such as iPads, and sharing that information among its members.

The technology consortium, which launched earlier this year, focused on the price districts were being charged Apple iPad Airs.

In an effort to ensure it was comparing the same device purchases across districts, the consortium said it focused on iPad Airs with 16 gigabytes and the same, standard manufacturer’s warranty.

The group says it found that the price for the same iPads varied in different districts from about $370 to nearly $500 per unit. The data showed that the prices did not follow any pattern consistent with the size of the 40 districts, which included some of the nation’s largest, and relatively small systems, such as one with less than 8,000 students. The price was also not connected to volume, or the numbers of units bought by those individual systems, Friedlander said.

Apple Wants More Specifics

The consortium did not reveal the names of the individual districts, or what each of them paid. Friedlander said the organization’s rationale is that it did not want to embarrass school systems that may have paid more than others, but rather provide them with useful information to help raise awareness of pricing disparities.

But as a service to the districts, the consortium will provide them with national and regional pricing data. It is also willing to act as a go-between, sharing pricing data between comparable K-12 systems with their consent, Friedlander said.

In a statement to Marketplace K-12, Apple officials said they could not comment in detail on the consortium’s findings, because the data did not provide enough specifics on the prices paid by each individual district. As a result, the company said it couldn’t know what factors may have shaped those costs.

But Apple officials argued that a number of factors could potentially alter the results. One of which is that the price Apple charges for iPads–as with many products in the market–tends to be highest when products are initially released, then falls after that. It was not clear from the consortium’s data at what point individual K-12 systems bought the products, and what prices they paid, Apple said in its statement.

In addition, Apple officials also said that even if districts evaluated by the consortium were using the same devices–iPad Airs–it was possible that the company negotiated to provide those individual K-12 systems with other products attached to the devices. Those add-ons could include software or professional development, which could have affected the cost, the company says.

The company forwarded a previous statement from its CEO, Tim Cook, in which he spoke of the company’s desire to “create products that are a whole solution for people–that allow kids to create and engage on a different level.”

Friedlander was skeptical of Apple’s explanation of the pricing differences. He said the consortium’s data does not show any pattern of districts paying less, if they bought the iPads at a later time.

He also was not convinced that other features or services were attached to districts’ iPad purchases in ways that would have raised the devices’ costs. Those additional features and services would likely have been broken out by the districts, and noted by the consortium’s researchers, he said.

The consortium hopes that administrators from districts participating in the study will share information with each other. Some districts could use the data to negotiate better deals with vendors, on their own. Or districts could use it to band together and make cooperative purchases, Friedlander said.

“Market forces work best when all the buyers have the same information,” Friedlander said, which will, in turn, “increase trust” between companies and K-12 officials. “Trust in the relationship is going to result in more purchases over time–at the best price.”

The Technology for Education Consortium’s work will also focus on fixing what it sees as broader problems with K-12 procurement, beyond pricing issues, Friedlander said. Many vendors, district administrators, and teachers have complained that the district buying process is slow and cuts off the flow of innovation.

As an example, Friedlander cited the way in which he sees the procurement process favoring incumbent vendors, and making it difficult for new companies to win contracts.

A savvy, big ed-tech company that holds an ed-tech contract with a district will work hard to conduct research and develop a sense of what district administrators and teacher like about their digital products, what they don’t, and what can be improved.

And so, when the district issues the next RFP for the same sort of work, the incumbent company is likely to have a leg up, because they have done their homework and know the district’s needs, he said. They see the language in the RFP, and they know how to respond.

When he was a school administrator, Friedlander said he would often speak with other chief information officers around the country, “all having the same frustrations.” He hopes his organization will ensure that more of those discussions take place.

For most chief information officers, “there are a lot of fires to put out every day,” he said. And “districts tend to operate in silos.”

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