Affordable Mac aimed at schools

Apple Computer (AAPL) introduced a new Macintosh destined for schools, as part of a larger comeback plan to reverse declining share in one of its key markets.

The new Power Macintosh G3 "All-in-One" is intended to address

Apple's Power Mac G3 All-in-One

one of the sore points in Apple's product lineup--the lack of a computer schools can afford. The company lost a significant amount of market share last year as schools started buying Windows-based computers that cost less than $1,000.

Apple says the new system comes with either a 233- or 266-MHz PowerPC 750 processor. Although the system is expected to be priced starting at $1,499, the unit does include a 15-inch monitor that is built into the system's curvy case. The system also comes with 512K of secondary cache, 32MB of memory, a 4GB hard drive, built-in networking capabilities, and a CD-ROM.

According to a recent report from Dataquest, Apple's lead in the combined K-12 and higher education market shrank by more than 14 percentage points to 26.8 percent market share last year. Apple executives dispute the size of the loss, citing third-party reports placing their market share between 29 and 33 percent, a range they point out is double that of their nearest competitors.

Apple executives also point to research from International Data Corporation which shows Apple systems represent over 50 percent of the installed base of computers in the K-12 market.

Apple, along with vendors of Windows-based machines, are targeting this segment of the education market because of the intense upgrade cycle schools are going through. A recent report from IDC cites a healthy economy and ample funding as reasons for a predicted five-year spending spurt on new systems that offer multimedia capabilities and Internet access.

Given these market conditions, the new system might very well become another strong seller for Apple, whose first G3 systems have been well recevied in by the consumer and corporate market.

Earlier in March, Apple took other measures to prevent erosion in one of its more loyal markets by offering schools the ability to buy custom configured systems from a special education sales Web site.

The Power Macintosh G3 All-in-One will be available to Apple's education customers in the United States and Canada after Saturday, the company said. Apple said it will offer a suite of software and curriculum for K-12 for schools with the systems.