An Apple A Day

George A. Kuhnreich, director of corporate planning for Tandy Corp., sits in his spacious office atop one of the twin Tandy Towers in downtown Fort Worth, looking and sounding very much like a general plotting a campaign. In fact, he is. "Your big play," he says, biting down on the stem of his pipe, "is going to come in the next 18 months," and the big victory he adds, will go to the one "who's there first with the most."

The battleground that has engaged Tandy, proud parent of Radio Shack and its TRS-80 microcomputer -- and other major micro manufacturers, such as Apple Computer, IBM, Atari, Hewlett-Packard, and Commodore Business Machines -- is the educational market and its 40 million schoolchildren. Students in that hotly contested target group -- kindergarten through 12th grade -- are the prize in an undeclared war for market share that will help determine the fortunes not only of the major vendors, but also of hundreds of small computer suppliers, peripherals manufacturers, and software publishers.

The key participants have already launched impressive campaigns. Apple Computer Inc., whose annual sales are approaching $1 billion, is lobbying to give free computers to all 100,000 elementary and secondary schools in the country. Tandy/Radio Shack, whose revenues last year totaled $2 billion, has offered to give the country's 2.7 million teachers free computer training. Last February, Hewlett-Packard Co. announced it would donate enough computer equipment to outfit a classroom in each of 14 California high schools. And on Capitol Hill, both houses of Congress are currently debating six pieces of legislation, any one of which would contain enough tax incentives to guarantee a rash of computer donations to schools.

Ironically, this high-tech largess is occurring at a time when schools are hard-pressed to pay teachers' salaries, when there are outraged calls for a return to basics, and when a federal report on the quality of education in the United States is titled "A Nation at Risk."

The San Jose, Calif., school district seems somehow incongruous. In February, two of its high schools received computer classrooms from Hewlett-Packard, and three months later, the district filed for protection under the Federal Bankruptcy Act. Although the computers were free, next year the schools will earmark an estimated 15% to 18% of their materials budget for computer-related purchases.

Not even the computer's severest critics believe that the mad rush can be slowed. A. Daniel Peck, a professor of education at San Francisco State University who heads The Committee on Basic Skills Education, a group opposed to rapid introduction of computers, responds with a grim, unequivocal "No," when asked if the pell-mell pace can be checked. "The best we can hope for," he adds, "is some degree of sanity."

Manufacturers have recognized the importance of the educational market from the outset. Tandy had its TRS-80 Model I's in Dallas classrooms as soon as they were assembled. Apple Computer already derives 25% of its revenues from educational sales. But only recently have companies begun to realize the market's true potential and started to shift their resources accordingly.

If predictions prove accurate, the payoff for these computer makers will come soon and be well worth the effort. Educational hardware sales alone are expected to hit $1.5 billion in 1985, and analysts say that educational software sales (about $30 million this year) will soon surpass that $1.5 billion. In June, there was an installed base of 417,000 micros, nearly double that of just one year ago.

Being the first manufacturer in a school is crucial for a number of reasons, explains Anne Wujcik, director of research for Talmis Inc. of Chicago. It prompts a school to purchase complementary hardware and/or software from the same vendor. The school's investment may lock it into that vendor when expansions are planned; and teachers and students trained on a system may develop a product loyalty that pays off when they purchase computers of their own.

Chris Bowman, once with Tandy's educational division and now manager of Apple Computer's home and educational marketing arm, concurs. "Common sense will tell you," he says, "that if a school lands a particular brand, buys software for it, becomes comfortable with it . . . the chances are extremely good that future purchases will be that brand . . . so it's fairly important to be the first one in."

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