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MAY 8, 2002 BYTE OF THE APPLE By Charles Haddad Apple's Classroom Counterattack It's launching a strategy that combines low-cost machines and teacher training to beat back Dell and the PC invaders
My apologies to my many French readers and to Napoleon fans of all nationalities, but this is a battle Apple can't afford to lose. Education represented 26% of its sales in 2001. Schools are the only place that many people are ever exposed to Macs. And it's there that the Mac wins over many of its lifelong fans. SLIPPING SHARE. Right now, Apple holds the lead in schools. Some sort of Apple-branded computer represent 50% of those used in education, with the PC makers dividing up the other 50% among them. But PCs are steadily capturing an ever-rising percentage of all new-computer sales. Apple's share of new sales to schools dipped to 14.7% from 20% in the third quarter, while Dell, the standard-bearer of the PC assault on the school market, rose to 39% from 36.8%. If the trend continues, PCs will inevitably overtake Apple in the installed base. Luckily, schools never throw anything out. Some are even still using the original computers that Apple sold in the late 1970s. Indeed, teachers remain, by and large, loyal to the Mac. But they don't hold the purse strings. And herein lies Apple's greatest vulnerability in the battle to dominate computing in the schools. Cost-conscious administrators have been swayed by Dell, which has been offering them computers as powerful as Macs priced as low as $600. The cheapest comparable Macs cost $400 more. CLUELESS TECHIES. Price isn't Apple's only weakness, however. As schools have become increasingly computer-dependent and made the jump to the Internet, they've had to hire information-technology specialists -- just like companies -- to untangle the complications. And these specialists are largely trained on PCs. They're clueless about the ease and cost-effectiveness of a Mac network -- especially one running OS X. And they invariably suggest PCs when school administrators ask them what computers to buy. The good news is Apple isn't sitting back on its candy-colored haunches. It has launched an aggressive counterassault to keep the continued allegiance of educators, targeting both their hearts and wallets. Last week, Apple announced that it would slash the price of its original gumdrop iMacs to $600. And it launched a new line of Macs designed and priced specifically for schools. Called eMacs, they'll sell for between $1,000 and $1,200 and include a 700-Mhz PowerPC G4 processor and a 17-inch monitor. This is such a bargain -- comparable equipment for consumers would cost from $1,300 to $1,800 -- that other Mac users are crying foul, demanding the same deal. TEACHER'S PET. Price is only half the battle. Apple needs to keep the Mac as important to educators as chalk and blackboards. And it's here that Apple really excels. Its PowerSchool software is now used by 3,000 schools. PowerSchool lets teachers track attendance, update grades, and post homework assignments online. The program is especially effective in that handful of schools where teachers have traded in their briefcases for wireless Apple iBooks. They can grade, take attendance, and post homework on the fly, and changes are immediately posted through PowerSchool on the school's Web sites. The PC has no equivalent to PowerSchool, in terms of reach and scope. Apple is building for the day when wireless-networked laptops with Internet access replace textbooks and chalkboards. In Hampton, Va., middle-school science teacher Gary Smith uses his chalkboard only to post Web addresses that students need, each of whom has a school-provided iBook. Students do assignments on the laptops and send them wirelessly to Smith's computer for grading. While this is a luxury only the richest districts can afford today, wireless technology will eventually be standard in all but the poorest schools. WINNING CONVERTS. Even in affluent school districts, though, teachers as a group remain woefully ignorant about computers and the Net. Here again, Apple has an opportunity. It has immersed itself in training teachers, in hopes of winning the allegiance of their bosses as well. Playing for the heart -- and not just the wallet -- should help Apple repel Dell's assault. Otherwise, the schools where Apple once dominated the battlefield, could emerge as the scene of Field Marshal Jobs's greatest and most crushing defeat.  Haddad, Atlanta-based correspondent for BusinessWeek, is a long-time Apple Computer buff. Follow his weekly Byte of the Apple column, only on BusinessWeek Online Edited by B. Kite Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | MAY |
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