Apple US has laid-off staff from its education unit. According to a spokesperson there were "minor work-force reductions".

A Dow Jones report states that Apple's education division has "fallen prey to state budget cuts and competition".

According to Dow Jones Apple would not confirm how many jobs were cut, or from which area they came.

The report indicates that Apple had hinted in regulatory filings that it was planning to address weakness in the education division. In its December 19 annual filing with the Securities and Exchange Commission Apple noted that net sales and unit sales in US education during 2003 were down 4 per cent and 6 per cent, respectively, as compared to 2002.

Apple said in the filing that it believes weakness in K-12 has been caused by funding pressures, state-budget deficits and increased competition, particularly for desktop computers.

Cross Research analyst Shannon Cross agrees. She said: "The education market has been challenging as state budgets have been so strapped.

"Many schools struggle to keep costs down; buying Apple computers entails the purchase of a computer and a screen, and many schools now take the cheaper option of just buying new PC boxes and using old screens."

Apple claims a shift away from higher-priced Power Macintosh and iMac systems toward lower-priced eMac and iBook systems were partly to blame for declining K-12 business. Portables accounted for about 43 per cent of total unit sales in the education channel during 2003, as compared with 34 per cent in 2002.