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Just five years ago, schools were one of the few places you could proudly display a Mac without fear of being considered either a computing simpleton or a hopeless romantic. They reigned supreme everywhere from the campus computer center at Harvard University to my son's elementary school in suburban Atlanta. In fact, Macs helped ease fearful teachers and administrators into computing. (The students, of course, had no such fear. I'll always remember my son, then age 8, showing his teachers how to turn on the Mac, write a letter, and print it out.)
His lesson couldn't have come at a better time. It was 1996, and President Clinton was championing the Internet and computers as the greatest educational tools since the pencil. Soon, parents nationwide were demanding to know why their kids' schools didn't have more computers. That jolted school administrators into ordering machines by the thousands. Unopened computer boxes lined the walls of our school library for most of a year because no one knew how to set them up, let alone connect them to the Internet.
I recount all this because it underscores how dominant Apple was in the education market. Long considered a low-margin backwater, schools have become a boom market for computers. And giant manufacturers such as Dell and Gateway took notice. No longer would Apple and, to a lesser degree IBM, be allowed to dominate the education market with little effort.
BIG BOO-BOO. Dell, in particular, began to aggressively market to schools, and that strategy has paid off handsomely. With 15.1% of the educational sales market, it's now the leader, while Apple, at 12.5%, has slipped to No. 2, according to Dataquest Gartner Group. The difference may look small, but it's a big deal to Apple, because the education market represents 40% of its sales.
I'd like to say that Apple was simply outmuscled by Michael Dell. But the truth is that Steve Jobs is at least partially to blame for Dell's ascendancy in educational sales. Jobs made a big boo-boo earlier this year when he canned the company's long-time freelance educational sales force and brought the effort in-house.
What prompted the move was the surprise departure of Apple's top education sales executive, Mike Lorion, who departed in the summer -- just as computers were being bought for the coming academic year. Trying to switch sales teams created chaos, according to the schools. Many administrators said the only way they could reach Apple was through the Internet, while Dell's salespeople were showing up in person.
LOST FOOTING. Jobs conceded at the company's recent briefing on third-quarter results that switching sales teams during the summer was a mistake. He almost had to admit the error publicly. Apple's third-quarter sales were down in no small part because of lower education sales.
Can Apple recover its lost footing? Not easily. It's hard to uproot PCs once they gain a toehold. After all, most kids use PCs to play games at home, and most parents use them at work. Not surprisingly, many people expect to find PCs at school, and administrators are just meeting those expectations by buying PCs.
Still, all is not lost for Apple. The company has built a strong reputation among educators. It's not hard to find a teacher or administrator who still raves about how easy it is to use a Mac. And most kids fall in love with them -- especially the gumdrop-shaped iMac -- once they've had the chance to bang around on one. The trick for Apple will be getting those iMacs in front of kids and teachers in the coming year.
Haddad, Atlanta-based correspondent for Business Week, is a long-time Apple Computer buff. Follow his weekly Byte of the Apple column, only on BW Online Edited by Thane Peterson
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Copyright 2000, Bloomberg L.P.
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