Microsoft deal may core Apple in schools

A proposed settlement agreement in a series of antitrust suits may not only give Microsoft a fairly inexpensive legal resolution, it may also help the company and its PC allies further erode Apple Computer's position in education.

Under a settlement proposal in a series of private antitrust lawsuits announced Tuesday, Microsoft agreed to donate approximately $500 million to help bring technology to some of the nation's most disadvantaged schools. The deal will also allow these schools to obtain a virtually unlimited supply of Microsoft software for the next five years.

Those terms, say analysts, could hurt Apple and other software providers. Historically, education has been one of Apple's primary markets. And although the company has slipped to No. 2 in kindergarten through grade 12--behind Dell--it still has a larger installed base than anyone else.

Free software, though, is hard to pass up. Apple, as well as Linux companies and other educational software developers, could find themselves out in the cold in school districts flush with new Microsoft products.

Microsoft could wind up "undercutting everyone in the education market," Gerard Klauer Mattison analyst David Bailey said. The best-case scenario for Apple would be that Microsoft increases the overall level of PCs in schools without directly harming a company like Apple, he said.

Linux specialist Red Hat Software tried to counter Microsoft's move soon after the settlement was announced. The company said it would provide its software to every U.S. school district and encouraged Microsoft to convert the software component of the deal to increased hardware donations, which costs the company little.

News source: Yahoo!/News.com

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