K-12 education is the strongest segment growth area, with a compound annual growth rate (CAGR) of 3.8%. Higher education should see a CAGR of 3.5% by 2008, and the full education vertical industry should enjoy a 3.1% CAGR. IDC believes that both higher education and K-12 schools will focus significant investment on network infrastructure and wireless as they expand the reach of their current networks. Desktop PCs remain popular in K-12 classrooms, but market penetration within that space has been reached. Laptops remain a growth area in both K-12 and higher education. On the software side, course management systems are no longer a growth area. Participants should prepare for industry consolidation.