Computer Sales Fall, but Not in Schools

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Despite signs of a computer-industry shakeout, including sharply falling sales and profits, management reorganizations, employee layoffs, and plant closings, educators in many states say they are buying more personal computers than ever before--but more cautiously.

In fact, if market analysts are correct, the number of microcomputers in schools will roughly double and reach or pass the million mark this fall.

"It's going to be amazing how many computers will be bought in this state next year," said Shirley A. McCandless, a computer-education specialist with the Louisiana Department of Education. "This will be our big year of buying," she added, because of a state-mandated computing course requirement that goes into effect in September.

The story is the same in Texas, where beginning in September all 7th and 8th graders must take a half-year course in computing and all high-school students seeking an advanced diploma must complete a full-year computing course.

"We're in the middle of massive acquisition because of the course requirements coming next September," said Sandy K. Pratscher, director of instructional computing for the Texas Education Agency.

Interviews last week with many other state education officials suggest further that the school market is growing strong. Multi-million-dollar purchases, for example, are expected in many states, including Minnesota, Colorado, North Carolina, Indiana, New York, California, and Alabama.

'Paranoid' About Equipment

Some state education officials report, however, that news of a computer-industry recession is making educators nervous--and thus more cautious about making the right purchase choices.

"District officials are getting increasingly paranoid about which equipment they should buy," Ms. Pratscher said. "The exit of the ibm PCjr caused a lot of concern in Texas schools. Even though ibm assures them and us that it will be supported, nonetheless it makes a lot of our school people nervous. Dollars are scarce and capital outlay is typically a large commitment and it's a little frightening for the superintendents to try to make hardware decisions because they're continually nervous about which company or product is going to go next."

In March, the International Business Machines Corporation announced that it would cease production of the PCjr, a machine promoted for the school market. The company, however, continues to market the machine for school use and says it will continue to support the product by providing software, spare parts, and optional hardware attachments.

In May, Apple Computer Inc., in the face of collapsing sales and deflated stock prices, reorganized its management--a move some education officials welcome because they perceive it as an attempt to strengthen the Apple II division, which makes the unit many schools now use.

Difficulties and earnings slumps in other companies, such as ibm, the Hewlett-Packard Company, the Digital Equipment Corporation, and Wang Laboratories have also received press attention.

"For a group that's not real sure of technology, this is very unsettling," Ms. McCandless said. "Educators are not used to seeing a lot of change. When the president of a major educational publishing company changes around, that may be buried in the back of a daily newspaper. But management changes at Apple was front-page news, what happened at ibm was on the nightly television news. When you see these things in the media, and you're using an Apple and ibm PC in your classroom, you stop to think about it."

No Cause for Concern

Some market analysts are quick to say, however, that there is no cause for concern. The school market, they say, is distinctly different than the consumer market, where the computer industry is suffering in part from having too much supply for a demand that has not lived up to ''wildly over-optimistic" projections.

The school market, said Jeanne Hayes of Quality Education Data Inc., is "alive and well and healthy. The consumer market is suffering in contrast to the projections."

According to recent press reports, sales of personal computers, which roughly doubled annually for several years, are expected to increase no more than 30 percent this year and may not increase at all.

"It's clear the home market has slowed," said Anne Wujcik of talmis Inc., another market-research firm. "I don't know that that's quite the phenomenon the press is making of it. No way could it double and triple like it did in the early days."

According to Market Data Retrieval, a reasearch firm in West-port, Conn., the Apple company's share of the school microcomputer market rose from 49.4 percent in 1983 to 50.9 percent in the fall of 1984. Radio Shack's share fell from 21 to 19.7 percent; Commodore's remained the same at 15.2 percent; and ibm's share increased from 2.7 to 3.5 percent.

Continued Support

Officials of those four companies said in interviews last week that they will continue to support the "important" school market, which they say offers their firms "tremendous opportunity."

Whether the school market will suffer its own slump when the number of computers in schools reaches a saturation level, however, also concerns school officials, who say that they want to be sure that the computers they buy today will be supported in the future, especially in light of technological advances.

"There's a great apprehension on the part of the the people out there having to make these purchasing decisions. They want to know if they're making the right decision," said Ron Wright, coordinator of educational technology for the Alabama department of education.

"They realize the technology is changing so rapidly that they can-not anticipate what they can buy today that will still be state-of-the-art five years from now," he continued. "They realize that won't happen. They're trying to make decisions to keep them in the top of the line for at least a couple of years, and that's a hard decision to make."

"I don't think the school market is dead," concluded Ms. McCandless. "I don't think computers are going to go away. I think there is a shakeout going on. Those companies that can provide us with service, maintenance, support services, and training on their machines will be with us. And those things cost companies a lot of money to do."

Vol. 04, Issue 39

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