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Apple Updates Educational PC

Apple Computer (AAPL - Get Report) is updating the eMac, its desktop computer targeted at students and teachers.

The company is discontinuing its old version, which was based on the original CRT monitor iMac, and replacing it with a version based on the company's latest consumer-oriented desktop computer, which includes a built-in LCD screen.

The new version will include an Intel (INTC - Get Report) processor, and while it will have a smaller hard drive and less sophisticated graphics capabilities than a regular iMac, it will carry a price tag of about $900, which is about $400 less than the low-end iMac.

It's also losing the eMac moniker.

Apple began selling the new "education configuration" of the iMac on Wednesday. The company has ceased production on the original eMac and will sell out its remaining stock through its Web site and sales representatives.

Although computers based on Microsoft (MSFT - Get Report) Windows have long ruled the corporate world, Apple has had a strong presence in the education market. And the space remains an important one for the company; about 12% of Apple's sales were to education customers in its last fiscal year.

Apple introduced its original eMac in 2002 as a low-priced alternative to its mainstream offerings for education customers. When the company launched the computer, it was based on an already outmoded design. A few months earlier, the company had replaced its original iMac with a lamp-stand-shaped LCD version.

Although Apple had updated the processor and specifications of the eMac after it introduced the computer, it never revised the design.

The company introduced its new all-in-one LCD iMacs in 2004 and added Intel processors to them in January.

The lowest-end iMac, which Apple sells for about $1,300, has a 160-GB hard drive, a "super drive" that will read and write DVD discs and a discrete graphics card from ATI Technologies (ATYT). In contrast, the education iMac will have an 80-GB hard drive, an optical drive that will read but not write DVDs, and a less expensive integrated graphics card from Intel.

Both computers come with a 1.83GHz dual-core Intel processor and 512MB of memory.

Shares of Apple were off $1.08, or nearly 2%, to $56.87 following the announcement.

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