Apple’s education market share half of Dell’s

Apple Computer Inc., the once dominant computer company in the U.S. education market, has seen its education market share slip in recent years. Apple, like many other hardware vendors, have fallen victim to the aggressive practices of Dell Computer Corp. and perceptions of the buying public, according to an IDC analyst.

In the first quarter of 2000, Apple and Dell were in a head-to-head battle for dominance in the U.S. education market. Dell, who at the at time had 22.6 percent of the market saw steady increases in its market share growing to 34.9 percent in the latest research numbers given to MacCentral by market research firm, International Data Corp. (IDC).

In the same period, Apple’s market share fell from 20.2 percent in the first quarter of 2000 to 15.2 percent in the most recent quarter of 2002, reaching a low of 12.4 percent in the fourth quarter of 2001.

“I think it [the decline in market share] happened to Apple in education for a similar reason it happened in the general market,” IDC analyst Roger Kay told MacCentral. “Windows became established as the defacto standard; for a lot of reasons that meant that Windows costs were less. Apple’s products are premium priced to begin with, although they have recently modified that, it’s too little, too late.”

Apple made several attempts to bolster its education division since 2000 when they hired Cheryl Vedoe to take the newly created position of vice president of Education Marketing and Solutions.

In 2001 Apple purchased PowerSchool, a student information system that was used by 2,000 schools nationwide. PowerSchool is a completely Web-based student information system that enables districts and schools to record, access, report and manage their student data and performance records in real-time. Parents, students, teachers and administrators use the system to share information about grades, attendance records and homework assignments.

Earlier this year Apple introduced the eMac, a new computer catering to the needs of the education market. While the eMac generated a lot of interest from educators and consumers, Kay doesn’t think the system will be enough to draw more schools into the fold for Apple.

“The eMacs look like a relatively good deal, but they appeal to the installed base — people that already have Macs that are looking to upgrade may look at these systems,” Kay said.

The most recent change in Apple’s education division saw Vedoe assume the role of president of Apple’s PowerSchool division in June. Apple brought in John Couch as vice president of education to head a combined education sales and marketing team.

Despite all these changes, Apple’s current education market share is less than half of Dell’s. In addition to fighting Dell’s aggressive tactics in the market, Apple also has to fight the perceptions of the buying public.

“There’s a belief out there that students should be learning on computers that will have to use when they reach the outside world, therefore Windows,” said Kay. “I don’t think this is particularly relevant — what I note about these interfaces is that you can spend your whole school life on a Mac and the day you get out of school you could go to work in a Windows shop and you would not be at a big disadvantage.”

With budgets increasingly coming under fire, schools look at all the costs associated with a computer purchase, in many cases turning to the IT managers for assistance.

“If you look at it from an education, IT manager’s point of view, it’s a lot more prosaic in that Windows tech help is easier to find and it’s cheaper when you find it, just because it’s more common,” Kay said. “I don’t think it’s obvious that Apple has a lower cost of ownership, but they certainly have a higher cost of acquisition.”

While Apple may lose ground to its competitors in higher-ed, one place that Kay thinks Macs will continue to be strong is with very young children. “The Mac interface is easier to use and therefore really young kids being introduced to computers would do better with a Mac — schools have cited this for reasons they keep Macs around,” Kay said.

In addition to the eMac, Apple has released other hardware and software products this year that may appeal to educators. Two flat panel iMac systems, the Xserve and Mac OS X 10.2 were all introduced in the last eight months. Kay sees Jaguar’s success in the education market hinging on its ability to network with Windows-based PCs.

While Kay agrees with Apple that its education customers would adopt the Xserve, he doesn’t “see it as driving new adoptions” to the Mac platform.

Despite being less than half of the nearest competitor in market share, Apple has not been without its successes in the past couple of years. In May of 2001, Apple made history with the largest single sale of laptop computers to the education market when Henrico County signed up to purchase 23,000 computers.

Yesterday, Maine Governor Angus King officially launched that State’s laptop initiative to give every 7th grade student in the state a new iBook. In all, 18,000 iBooks will be distributed to students this week in Maine. King also said that he plans to expand the program to include 8th grade students next year.

Apple declined to comment for this story.