Microsoft Loosens Apple's Hold on Schools
By LAURIE J. FLYNN
Apple Computer, formerly the undisputed leader in sales of personal computers to schools, has steadily lost ground over the years to lower-priced PC's that run Microsoft Windows software. And these days the company faces another threat in the education market: a proposed class-action legal settlement by Microsoft that could result in the donation of hundreds of millions of dollars of Microsoft software to needy schools throughout California.
Under the deal proposed last month, Microsoft would offer more than $1 billion in vouchers, ranging in price from $5 to $29, for technology from Microsoft and its competitors to California consumers who bought Windows, Office and other Microsoft products from 1995 to 2001.
Once the settlement period was over, Microsoft would then donate two-thirds of any unclaimed proceeds to the state's 4,700 neediest schools — primarily in the form of Microsoft software and technology; the other third would revert back to Microsoft.
In Apple's view, the deal to resolve the California consumers' lawsuit would not only let Microsoft off easily by giving some of the money back to the company, but would also turn what should have been a punishment for anticompetitive behavior into a means for Microsoft to build a bigger share of the state's school software market.
"Apple strongly believes that Microsoft should make the entire pool of unclaimed voucher funds available to our schools to purchase any technology products that best meet their needs," Apple said in a statement last month, after the proposed settlement was announced. "Microsoft should not be allowed to dictate which technology our schools choose to buy with these funds."
The settlement is still subject to a judge's approval. Microsoft, determined to secure the deal and avoid another prolonged legal battle, has been negotiating to try to make the arrangement more palatable to Apple.
"We understand there may be concerns," said Jim Desler, a Microsoft spokesman, "and we're open to ways we can address them within the structure of what we think is a competitively neutral agreement."
A year ago Apple opposed a similar proposed settlement that would have ended more than 100 private class-action lawsuits against Microsoft around the country. In that deal, Microsoft would have given $1 billion in money, software, services and training to about 12,500 public schools, as well as Windows licenses and refurbished PC's. A federal judge threw out the settlement, saying it could adversely affect competition.
The judge, J. Frederick Motz of the Federal District Court in Baltimore, wrote in his ruling that the proposed settlement appeared to provide "a means for flooding part of the kindergarten-through-high-school market — in which Microsoft has not traditionally been the strongest player, particularly in relation to Apple — with Microsoft software and refurbished PC's."
Despite such snags, tying legal settlements to donations of products and services is becoming increasingly common in the computer industry, according to David Daoud, an analyst with the research house IDC.
The most notable of example was the settlement of a class action suit that had accused Toshiba of using defective chips in the control disk drives of its laptops, possibly causing data to be corrupted or lost. The $2.1 billion settlement, reached in 1999, included the establishment of a nonprofit organization to distribute $350 million of the settlement's proceeds to low-income schools.
For the last several years, education has been the fastest-growing segment of the PC market, but most of that growth has been in systems sold by Dell Computer and other manufacturers that run Microsoft Windows. In the second quarter of 1996, nearly one-third of all computers sold to schools were manufactured by Apple and ran Apple software, while Dell was in a distant fifth place, with less than 3 percent of shipments, according to IDC.
By last year's third quarter, Dell was the runaway leader, with almost 36 percent of all shipments to schools, while Apple's rank had fallen to third place and its share of shipments was just under 13 percent.
Because schools tend to keep their computers for years, there are still more Apple machines in schools than there are any other brand. And the company has been selling more computers to schools than ever — 820,000 in 2001 compared with 630,000 in 1995.
But Apple's share of the market continues to shrink. In 1995, about 60 percent of computers installed in schools were made by Apple, according to statistics from Quality Education Data of Denver; that number has dwindled to 31 percent.
At the Clayton County school district, just south of Atlanta, which has 52 schools and nearly 50,000 students, administrators stopped buying Apple computers about four years ago.
Today, only a relatively small number of Apple-label systems remain scattered throughout Clayton County schools. The district now has 15,000 Windows-based machines — all made by Dell. "Mostly, it was due to cost," said Todd Williams, Clayton's director of technology. "But it was also decided based on what our students were more likely to see in college and at work."
These days, more than a third of Clayton County's personal computers are notebooks, with the district supplying one to each teacher. That has improved the teachers' computer literacy, Mr. Williams said, and has made it easier for teachers to tap into Internet-based training programs. Moreover, an investment in movable "labs" equipped with wireless notebooks is putting technology into the hands of more students, he said.
The education sector has been a bright spot in an otherwise bleak market the last few years, continuing to grow while the consumer segment has stumbled. Helping stimulate the school market has been the standardized testing provisions of President Bush's No Child Left Behind Act, passed last year. Many districts have adopted more technology to simplify the testing and assessments that are required, said Jeanne Hayes, president of Quality Educational Data. "There's also an emphasis on individualized instruction, and technology is the best tool we have for that."
Apple hopes more of those tools are not about to come with Microsoft labels.
Although it is nice for the Times to sit up and take notice of Apple's objection to the California MS settlement, this strikes me as an opinion piece presented as topical news.
Apple's formal objection was filed, oh, I dunno, a month ago.
That Apple began losing market share to WindowsOS in schools a few centuries ago is hardly news. It seems perhaps inevitable, considering the Apple ][ owned the market solely based on it's value as a teaching tool 20 years ago. Of course, back then, few schools had many (or any) computers to begin with.
This Just In... computers have fallen in price and increased in utility. Now, you can buy computers from a wide number of vendors. School Districts are now looking at alternatives to Apple computers in schools. Many stick with the brand, while others go for the new, GIU based Windows 95 OS.
Sounds like she had to meet a deadline and couldn't come up with anything else.
The US educational system is much different from Canada's, especially at the local level. There are many schools in the US that have few, or no, computers today (ie the 21st century). Spending on education in the US is nearly a full percentage point of GDP lower than Canada's, and is dependant on the local tax base for funding. Poor county? Cheap computers. Got an IT department now? They sure aren't going to recommend Macs; keeps them out of work.
How about this one:
US schools are turning away from the once dominant Texas Board of Education approved textbooks. (School districts across the US favor the ultra-conservative texts approved for use in Texas).
If you read Saturday's Globe & Mail, you may have seen the article about text-based cellphones used to cheat on exams, and Instant Messaging replacing the passed note as the preferred form of classroom gossip. Perhaps they could have mentioned that Macs suppport the teacher monitoring any screen in the classroom, but instead they just whined that it was unstoppable.
The same edition noted that Dell is killing it's PC comptetition in the US market; more than 1-in-5 new computers sold in the US last year were Dells, making it the undisputed leader by a huge margin. As little as 2 years ago, IBM and Compaq would have been neck-and-neck with Dell. No story there, I guess.
gordguide, you raise an interesting point re your comment that "Perhaps they could have mentioned that Macs suppport the teacher monitoring any screen in the classroom". I did not know that this feature was available on a Mac. Interesting............
14" G4 iBook
15" MacBook Pro (July, 2009)
13" MacBooK Pro with Retina Display
"The man who does not read good books has no advantage over the man who can't read these books." Mark Twain
Variety of Vendors?
Not really Dell will have 85 % of the market for schools by 2010.
Are they really cheaper and better?
I think they are adequate as fa as wintel machines go, I dont know why you need to buy stock PC boxes from a big USA corporation.
Remote desktop... this is insane. I need to become a teacher yesterday. This is insane. The only argument that I was going to make was that with the struggles with K12 @ the funding level, windoze boxes may make sense (or cents). But that's it. Hey, maybe the school superintendents want to save on computers like NASA saved on tiles.