The least well-funded districts aren't going to pay iPad prices to supply each student with an iPad.
Even the richest school districts aren't going to send children out the front door of the school with a desirable, stealable consumer electronics device like the iPad where they might be targets of theft.
This is the one point most people don't even consider when they think about replacing textbooks with tablets: the physical safety of the children. But educators are obsessed by it, and won't embrace devices that put kids in danger.
Apple wants to dominate the future of publishing, which is the interactive multimedia ebook market. The key to capturing that market is the education publishing market. Apple wants to use its free iBooks Author product to get everyone making educational materials. They want to inculcate a generation of future authors in the Apple way of publishing.
But that's not going to happen unless K-12 is using iPads. And that's not going to happen with a $500 iPad.
The smaller, cheaper iPad is Apple's key to dominating the future of publishing, and that's why I believe recent speculation that Apple will unveil a small tablet later this year.
Big tablets like the current iPad will be popular. But they'll always be the high-end minority. The future belongs to small tablets like the Nexus 7 and the upcoming mini iPad.
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