Apple Computer on Tuesday unveiled a discounted version of its .Mac suite of online services for the education market.
But analysts say the Cupertino, Calif.-based company is charging too much for the service, particularly for cash-strapped schools.
"Given that there are already indications that education spending is down, which tends to follow the economy by about a year, there's a heightened price sensitivity in education," said IDC Roger Kay. He noted that school budgets follow the tax collections, which were down last year in many places because of tough economic conditions.
In July, Apple announced it would eliminate its iTools suite of free Web services and replace them with .Mac. Existing iTools customers have until Oct. 14 to take advantage of a $49 promotion for the first year of .Mac. The .Mac for education program also attempts to give schools a break on the regular $99 price.
Under terms of deal, education customers signing up for .Mac would pay $59 a year and the services are slightly reduced. For example, online storage that is half the normal account. Education customers also must buy a minimum 10 licenses to qualify for the discount.
"Our goal is to provide a cost-effective solution for educators that meets the needs of the classroom," an Apple spokesman said. "This price is a substantial discount, and we've made it easy to purchase in purchase orders and volume licenses."
But for some schools the price could still be too high, particularly when Apple's online services were previously available for free.
"Introducing a product that hitherto had been available for free that you're now charging for would lead to some resistance on the part of buyers," Kay said.
Mike Center, a member of a Cincinnati school district's technology committee, agreed.
"If they are speaking in terms of one account per student it would be silly," he said. "In a district with 8,000 plus students that sounds like a half-a-million dollars poorly spent."
Apple had used iTools as a value-added extra to schools considering staying with Macs versus switching to Windows PCs. In recent years, Apple has ceded market share in the education to Dell Computer, according to market researcher IDC. During the first quarter, for example, Apple had 14 percent market share compared with Dell's 33 percent. For a long time, Apple held a virtual stronghold on the education, particularly kindergarten through grade 12, Kay emphasized.
Apple launched iTools about two years ago and quickly positioned the suite of services for getting more value out of Macs. Many schools saw iTools as an incentive to continue using Macs.
Center said he "received a day-long presentation from Apple that included the free iTools as a key feature for bridging the Mac-Windows platform gap."
For example, students could use the online storage, called iDisk, to transfer school work to a Mac or Windows PC at home. They also had access to an e-mail account and tools for publishing projects on the Web.
"This was a large selling point to those of us wishing to seriously look at converting our district over to the Windows platform," Center said. "With over 3,000 Macs in our district, we have just completed the first year of a three-year upgrade replacing 1,300 older machines with new iMacs in our elementary schools this round."
The Cincinnati school district still has another 2,000 computers to upgrade during the next two years.
"Since Apple's largest market is in the education market I feel it's critical for them to restore an iDisk service, without charge, to this section of the marketplace," Center said.
Schools also get less for what they spend on .Mac. Their lower cost nets them 50MB of online storage versus 100MB for the $99 account and only 10MB for mail instead of 15MB.
Schools are not the only pockets of resistance to .Mac. Apple on Tuesday reported that only about 180,000 people had signed up for the service, a fraction of the estimated 2.2 million iTools subscribers.