Apple's Popular iPod Inspires A 'Mini' World

Here comes the $99 iPod. Apple Computer is going mini – in more ways than one.

Chief executive officer Steve Jobs made a big splash at the company’s recent annual MacWorld tradeshow, unveiling smaller, cheaper versions of both its iMac computer and iPod music player.

The stunner was Job’s introduction of the tiny "iPod shuffle," which Jobs described as being lighter than a pack of gum.

Several versions will hold at least 120 songs and sell for between $99 and $149. Apple’s standard iPods, which flew out of stores to the tune of 4.5 million units during the holiday season, start at $249 and store at least 1,000 songs.

The other new Apple entrant – the "Mac mini" – will offer versions for $499 and $599 beginning Jan. 22.

It’s the first plunge for Apple into the entry-level computer market long dominated by Dell and Hewlett-Packard. Until now, Apple had focused on higher-end devices for sophisticated users. The current MacIntosh lineup goes for $799 to $1,899

"They needed to address that (low-end) market, and they’ve done so pretty competitively," said analyst Craig Kempler of Independent Investments.

The one catch with Apple’s price announcement is that it doesn’t include the separately sold keyboard, monitor and mouse, which can nearly double the final price.

A price analysis by The News of components on Apple’s shopping Web site showed the cheapest "Mac mini" system customers can build from various components is just $67 below Apple’s $799 eMac.

Still, if the initial reaction to the announcement is any indication, sales could take off pretty quickly.

"I’ve gotten 10 calls in the last 20 minutes; a lot of people have been waiting for it with the rumors going on," said Mark Hirsch, a manager at the downtown Manhattan J&R Computer World.

Apple’s Web site and online store was all but frozen Tuesday within minutes after Job’s announcement.

Since iPods need computers to download music, analysts said Apple is looking to expand its iPod market to those who don’t yet have a computer. Tossing out a cheap Mac will give them the hardware they need to operate a cheap iPod.

"They’re calling (‘Mac mini’) a computer, but it’s really an appliance," said New York money manager Gene Walton. "You really can’t even call it a MacIntosh."

He said Apple seems to be on an iPod-driven strategy to hit the mass market, but such a strategy "is weak." IPod users, he observed, can already get a $500 computer from Apple’s competitors.