The Apple Computer Co. says all it wants to do is put a computer in every school.
To accomplish the goal of educating students for the electronic age, it wants an unusual and controversial subsidy from the government in the form of a tax bill now on the agenda for the Senate's forthcoming lame-duck session.
With colleges and universities beginning to require students to own personal computers, and with manufacturers competing for orders in what promises to be a major new market, the bill has provoked strong opposition from critics who think it favors Apple and pre-empts the functions of local school administrators.
The bill, which was approved overwhelmingly by the House and cleared by the Senate Finance Committee, would greatly expand the tax deductions that computer manufacturers could take for equipment they donate to elementary and secondary schools. The Reagan administration opposed the bill last spring, but has changed its mind and now is supporting it.
The tax break would be available to any manufacturer of microcomputers with a capacity of more than 32K RAM -- or 32,000 bits of random-access memory -- a dividing line between the simpler home computers that sell for less than $1,000 and the more elaborate machines like Apple's. The legislation is commonly known as the "Apple bill" because the California company has lobbied strenuously for it and is committed to donating computers to most of the nation's schools if it goes through.
Few of Apple's competitors have endorsed the bill, and some are opposing it actively.
"There are a lot of computers in the schools already; it's not all that rare, and the public schools have the staff and the plans to move vigorously into the computer era," said John Roach, chairman and chief executive officer of Tandy Corp., parent of Radio Shack. "Why does Uncle Sam have to give an extra subsidy? It might have been a valid tactic four years ago, but not now."
International Business Machines Corp., another major competitor in the crowded personal-computer field, also has declined to endorse the bill. "As a general rule, we do not support or encourage measures that would change the tax laws to give the industry an unfair advantage," a company spokesman said.
Aside from Apple, Hewlett-Packard Co. is the only computer manufacturer that supported the bill at congressional hearings. Other industry leaders, such as Texas Instruments Inc., Commodore International and the Atari division of Warner Communications Co., withheld their endorsement. So did the Computer and Business Manufacturers Association, an industry trade group, where a spokesman pointedly recalled that "many of our members have made donations in the past without this bill."
There appears to be little doubt that the student market for computers is expanding rapidly. At least four technology-oriented colleges -- Drexel Institute of Technology, Carnegie-Mellon University, Clarkson College of Technology and Stevens Institute of Technology -- already have announced plans to require students to buy or rent personal computers. Ohio State University, the City University of New York, and the Universities of Texas and Missouri have made "substantial" purchases under its volume-discount program, IBM says, and the company has expanded its discount program to make the lower prices available to individual students and faculty members.
Steven Jobs, Apple's 27-year-old chairman, told Congress in hearings that it was essential for the national welfare for students to begin acquiring computer training long before they get to college, and that the proposed tax credits would make the equipment available to schools that otherwise could not afford it.
"Leaving this to the colleges in today's environment is equivalent to leaving the teaching of English grammar and arithmetic to colleges," he said.
The bill was endorsed by representatives of some pillars of the educational establishment, but major groups such as the National Education Association and the American Association of School Administrators in effect have looked this gift horse in the mouth and have been less than enthusiastic about what they found.
"It's hard to say a bill is bad when somebody comes up and says they're going to give you a free computer," one NEA official said privately. "But the hardware dictates the direction you're going to go with your program." He said that Apple, which has pledged to donate tens of thousands of computers if the bill is enacted, "isn't dumb. They know you'll have to make a tremendous investment in their software."
The bill was drafted by Apple's Washington lawyer, Eric Fox. Critics in the schools and the computer industry charged that it was tailored to Apple's specifications, a marketing device to promote Apple's image, and a move to help Apple unload obsolete inventory. Jobs denied all those charges, apparently persuasively, because the House approved the bill by a vote of 321 to 61.
The House version of the bill would increase the tax deduction that corporations could take for donated computers from the "basis," or cost of manufacturing, to "basis" plus half the wholesale markup, up to twice "basis." If a computer costs $1,000 to make and is priced at $2,500 wholesale, for example, the deduction would be $2,000. A corporation taxed at the maximum rate could recoup about 92 percent of its manufacturing costs.
The estimated revenue loss to the Treasury would be $35 million in the House version of the bill, which would grant the deduction only for equipment donated in 1983. The Senate version would cost an estimated $68 million over three years.
Jobs said the bill is "in no sense a free ride for Apple," because it still would cost the company at least $100 for every donated computer, "or $1 million for every 10,000 computers we donate."