While reading my daily dose of AppleInsider, I came across an article that discusses how sales are lagging for Apple in both the education and business markets. This should come as no surprise to anyone who keeps track of Apple. If you read my first post about Apple, you will no doubt remember how I am concerned that they have lost focus. Yesterday the quarterly reports came out and to the amazement and disbelief of everyone, Apple has lost revenue in the educational market. I am not going to comment on the business side of this, but I am going to talk a bit about the educational side.
I am a teacher. I use Macs to teach my video production class. In my opinion, the Macintosh platform is the most stable, elegant, and easy to use platform available. However, all this comes at a price. Yes, Macs are on the surface more expensive than PCs. I am not going to go into a detailed comparison of ROI or server licenses or anything like that. I totally understand all the costs that go into figuring out the total cost of ownership and I firmly believe that the Mac is a less expensive option in the long run. However, none of this matters for a school who can purchase 2 or 3 PCs for the price of 1 iMac. I am talking strictly budget outlay. Most of the computers on my campus I would estimate cost between $500 and $600. I am looking at purchasing 10 new iMacs for my video production class at a cost of $1399 each. Yes, I could get the cheaper ones, but this machine is the best fit for my class. The problem here is that Apple needs to make a sub-$1,000 iMac for the educational market. I am not talking about a stripped down model or an eMac. I think Apple should discount their models more for educational institutions. The problem is that as an educational institution we are paying only $100 less than full price. Really? Is that the best Apple can do? Can you not at least throw in AppleCare? If you truly want to compete in the educational sector, you have got to lower your prices or make them more of a value. You forget that there are a lot of business managers out there that only look at the numbers. Luckily, my school doesn’t have one like that, but many do. It is extremely hard to justify a machine that is double the cost unless that business manager is in to technology. If Apple could lower the price, I believe they could once again own the education sector. I mean, if it came down to paying $500 for a PC or $700 for an iMac that could run both OS X and Windows, I think the choice would heavily favor Apple. However, this is just for the machine itself. We haven’t even gotten in to software.
Ahh yes. Software. Since I teach video production I would be looking at purchasing Final Cut Studio 2. I like Final Cut Studio, I really do. But, like I said in my earlier post, it is becoming dated with no word on a new version. If I want to outfit my lab with copies of FCS 2 it will cost me $499 per license. That isn’t too bad, but it could be better. With that I get Final Cut Pro, Motion, DVD Studio Pro, Color, Compressor, and Soundtrack Pro. With this package I can edit video, create motion graphics, and output to a variety of devices. Now, if I go with Adobe, I can get their CS4 Production Premium bundle for $599 per license. With the Production Premium bundle I get the following: After Effects, Premiere, Photoshop Extended, Flash Professional, Illustrator, Soundbooth, OnLocation, and Encore. What do you think the best value would be? That’s right, the Adobe bundle. Why is Apple pricing itself so high? Do you want to know the real kicker? If I wasn’t purchasing for an institution and purchasing for myself, the price of Final Cut Studio would rise by $200. That’s right $699 for Final Cut Studio or $599 for CS4 Production Premium. This is a no-brainer.
Here is my problem. If you are truly wanting to grow your business, then the educational sector is the best place to start. You get the kids hooked on the products at a young age. If they learn on a Mac and use applications on the Mac and are intimately familiar with the Mac, then guess what kind of computer they will want. That’s right, a PC! Just kidding, they will obviously want a Mac. Of course, some quality games wouldn’t hurt either, but generally speaking they will gravitate toward the Mac. We are already seeing this in the higher education sector. Most of the graduating seniors that I have taught over the past 3 years are going to college with Macs. Many of them would always complain about the Mac, but when it came down to it, chose that platform. Apple needs to think hard about their academic pricing. The computers are discounted but they could do better. Think about how many students are using computers daily in all the schools. What an opportunity to reach that market. I know that iPods and iPhones have helped bring some in, but not nearly as many as a Mac in every class would.
I am in no way advocating dropping the price of any of their products in any place other than the educational market. I truly believe that Apple has a superior product, and frankly I am glad they are priced a little higher than PCs. People gripe about price all the time, yet they would gladly pay a premium for a Mercedes rather than purchase a Hyundai. Why is it okay for a car, but not a computer? I am fine with Apple not having 80% of the market, but I think they can do something about their academic sales. We, as teachers, are out there fighting for you. Help us out, please!
Update on Wednesday, July 22, 2009 at 8:33PM by Andy Brown
This is in response to the comment left by Steve Jobs’ Pancreas.
Thanks for commenting Pancreas. This is my point exactly. Apple is too worried on their iPhones and iPods. It seems as if they are dropping everything to keep up the iPhone. I love the iPhone, but the problem is that by focusing too much on the consumer portion of the equation they neglect the professionals and educators. Back when I was growing up in the 80s the computers that were in the schools were Apples. Now they are not. Apple lost that market. They have done well since then, but the shift to mainly consumer products is what baffles me. What happens when the economy really hits the toilet?
Tim Cook said that it was the slowing of the economy that has led to the slowing down in the educational and business sectors. I’m not so sure. the economy is crap but everyone has all this disposable income to buy the new iPhone? We read all the time that Apple is trying to gain market share in the educational and professional markets, yet everything they do seems to contradict this. Apple has done extremely well with their branding with the iPhone and iPod. These products have introduced countless people to the Mac platform. These products have been a genius bit of marketing on Apple’s part, but they need to keep going. People are wondering if and when Steve Jobs steps down if there is someone that has his vision that can keep the company going. I hope they do have someone waiting to step in.
As far as the Apple Stores go, I totally understand what you are saying. I worked at our local Apple Store for a year. During that time I converted a lot of people to the Mac. I also trained them on how to use the Mac. The problem is that, at least here, the knowledge of the hardware and software has gone into the toilet. I just about refuse to go into my local Apple Store. There are maybe 5 people that I would seek out to answer questions. The rest have no clue. When you first tell me that Apple does not make a program called Aperture and then once proven wrong, tell me it is included in Final Cut Studio, we have a problem. Apple is a cool place to work, but locally, they are relaxing their standards in regards to who they hire.
I really don’t want to bash Apple. They are a great company and make excellent products. My concern is about staying the course. I don’t want to change. My concern is that I will be forced to change because Apple has changed direction.