When Harvard's Office of Information Technology (OIT) barreled into the the student computer market with manufacturer-subsidized, cut-rate Macintoshes from Apple, Inc., local high-tech merchants were apprehensive. And the business certainly hasn't been smooth, with three outside computer stores in Harvard Square going under in the past six months.

"Harvard selling computers hurts us very much," said the Coop's Peter Chew, a buyer for the store's wounded computer department. "The Mac especially hurt us--there's just no way we can compete."

University stores sold 3700 personal and microcomputers to students and assorted departments during the 1985 fiscal year, according to the OIT. Prices for hardware purchased through the University average between 30 and 40 percent below the manufacturers' suggested retail price.

The latest casualties of the local computer wars are Computerland (formerly of 1000 Mass. Ave.), Harvest Computer (118 Magazine St.) and The Program Store (Dunster St.).

Nevertheless, Guy Ciannavei, associate director of the OIT, maintains that Chew exaggerates the damage wrought by the University. "You have to look at the successful stores," he said.

"For one thing, Harvard has some pretty slim software offerings," Ciannavei said. Since Harvard may sell computers to students who otherwise might not have purchased one, the University could even aid local merchants by increasing the demand for necessary software.

Ciannevei attributed Computerland's demise to a more general failure, noting that the Cambridge store was part of a franchise which also folded in Boston and Wellesley. The other two bankruptcies he attributed to normal competition.

Radio Shack's Manager Brian Houle agreed. "I don't know what my competition's done wrong," he said, "but we're pretty robust here."

Houle called Harvard's computer sales "Very, very helpful" to his business, citing increased student interest in computers and high demand for various software systems.

Private businesses can offer services not found at University stores, Houle added. "People aren't always looking just at bottom-end price," he said. "We can answer general questions and help people get the right software."