Apple Bags $30M iPad Contract From LAUSD

Apple Bags $30M iPad Contract From LAUSD
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Apple Inc. (NASDAQ:AAPL) has won a contract from Los Angeles Unified school District (LAUSD) to supply iPads in the school for the children. The contract is worth $30 million. Apple Inc. (NASDAQ:AAPL) won the contract in 6-0 vote by the district school board, says a report from LATimes.

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Apple Bags $30M iPad Contract From LAUSD

Apple – Details of the contract

Apple Inc. (NASDAQ:AAPL), as per the contract, will supply 35,000 iPads to 47 LAUSD school. Each device will cost around $678. The price of the iPads to be supplied is higher than the retail price, but the devices will be preloaded with the range of educational software before delivering it in the school. This is an extra cost added, which in turn increases the price.

The $678 device does not include the wireless keyboard, which can be vital for the older students. The company is providing a three-year warranty including free replacement machines for up to 5 percent of the value of the purchase.

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Great Win for Apple

Apple Inc. (NASDAQ:AAPL) has secured a great win through this contract. LAUSD is the second most dominating school system. The contract given to Apple Inc. (NASDAQ:AAPL) act in favor of the company as it gets the immense support for its brand. The other school districts will probably get influenced by the decision made by LAUSD when they will decide to order tablets for their schools.

As Apple Inc. (NASDAQ:AAPL) CEO Tim Cook said last year, “The adoption rate of iPad in education is something I’d never seen from any technology product in history. Usually, education tends to be fairly conservative in terms of buying, or K-12 does, and we’re not seeing that at all on the iPad.”

How the school will pay Apple

LAUSD has agreed to spend hundreds of millions of dollars by choosing Apple Inc. (NASDAQ:AAPL) as the only vendor in a two year contract. Supt. John Deasy was the one who decided upon narrowing the technology gap for those students who belong to low income districts. The source through which he is looking forward to pay for the iPads is school construction bond, which is a topic of discussion because it is repaid over decades. Generally bonds are utilized in building and making advancement in the campuses.

According to a Board member Steve Zimmer there can be other devices rather than tablets, which can better suit the need of high school students. He said that the approval given to the iPad will be one of the most high profile ones.

Students will be allowed to take them home, but controls will be installed to limit undesirable content like pornography. Also, limited use of social networking sites will be available.

Microsoft Cortporation (NASDAQ:MSFT) was also considered as an option, but eventually the board zeroed in on Apple Inc. (NASDAQ:AAPL).

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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