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Apple Keeps Thinking Small

Posted on 11 January 2005 | 9:33 pm by Media Lemur

Apple Computer Inc. grand poobah Steve Jobs introduced a cut-rate computer the size of a paperback book on Tuesday and an even smaller iPod that starts at $99, but holds fewer songs than its hard drive-based siblings.

The new products seek to make inroads against the traditionally more affordable PC market and against lower-cost competitors to Apple's wildly popular iPod.

The Mini Mac computers, smaller than even some standalone external computer drives, go on sale Jan. 22. They lack a monitor, mouse and keyboard. The 40-gigabyte Mini Mac will cost $499, an 80-gigabyte model $599.

The computer comes with Apple's latest operating system, Mac OS X Panther, as well as the newest version of its iLife suite of digital media software programs, also unveiled Tuesday.

The product for the first time puts Apple in the budget desktop PC arena, which so far has been largely confined to personal computers that rely on Microsoft Corp.'s Windows operating system.

Building upon the success in a rapidly growing niche that it already dominates, Apple also is rolling out two lower-priced versions of its iPod music players. The iPod Shuffle, available immediately, is smaller than most packs of chewing gum and weighs less than an ounce. Unlike the hard drive-based iPod Mini, it doesn't have a display. There's a scroll wheel for the controls so a user can either play the songs in order or have the device automatically shuffle stored songs in a random order.

Apple is selling two versions of the iPod Shuffle. The smallest will have 512 megabytes of storage and cost $99. A one-gigabyte version, which holds 240 songs, will sell for $149. The lowest cost iPod is the mini, which costs $249 for four gigabytes — enough to store about 1,000 songs

The iPod has helped infuse new life into Apple. In the past year, the Cupertino-based company's stock has tripled on strong sales of the iPod, which is emerging as one of the 21st century's first cultural icons. Now I'm not a big Apple guy as far as the desktop computers go (although many can argue their case for them very strongly, especially graphic designers) but there's no denying they are the masters of the MP3 market, and analysts expect the new iPods will help Apple hold this market lead even stronger.

Because many rival flash-based players have just 256 megabytes of storage, Apple is "sticking to its cut-above position," said Susan Kevorkian, an industry analyst with IDC. "There are plenty of people who want an iPod but haven't been able to afford the $249 Mini, so offering these lower-priced players allows Apple to attract not just new users but those who already own an iPod but want an even smaller version."

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