Image by Getty Images via @daylife
Steve Jobs had a dream of making traditional textbooks obsolete.
Now Apple (AAPL) has promised to reinvent textbooks. Today Apple introduced iBooks 2. iBooks 2 can be purchased, starting today, from Apple's iBooks store.
iBooks 2 is rich in swiping and pinching gestures, animations and video. Apple is completing the package with iBooks Author, and a new iTunes U program. iTunes U allows teachers to create online courses and handouts.
iBooks Author is a WYSIWYG app for writing interactive books. The app runs only on Mac. The app allows one button publishing of books to an iPad.
Apple has managed to partner with the giants of the textbook business including McGraw-Hill (MHP), Pearson, Houghton, and Mifflin.
The key question for investors is the impact of this program on Apple stock. The answer based on the ZYX Change Method is that iBooks will not have a material impact on Apple stock.
First, the computers at The Arora Report that monitor every trade in Apple stock and are programed to analyze the data to decipher 'smart money' actions are showing no accumulation in the aftermath of the announcement. These algorithms were also not showing any accumulation in the days leading to the announcement of iBooks.
Second, Apple is focusing on K through 12. Not many students in this market have iPads.
Third, Apple has not chosen to make iBooks Author available on Windows PC. As popular as Mac is in the education market, limiting to Mac narrows the usage.
Fourth, textbooks are a very profitable business for Apple’s partners who are not likely to easily let go of old ways that generate tremendous profits.
Finally, companies such as Barnes & Noble (BKS), Amazon.com (AMZN), and Google (GOOG) are also focused on textbooks and are likely to come up with competing tools.
About Me: I am an engineer and nuclear physicist by background, have founded two Inc. 500 fastest growing companies and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report which publishes four newsletters to help investors profit from change. Please feel free to write me at Nigam@TheAroraReport.com.
Full disclosure: I am long Apple from an average of $131. I took profits on 50% of the position at an average price of $360. Subscribers to ZYX Buy Change Alert may have a similar position and may have taken similar actions.
