Apple launches Baby iPod

Apple has introduced a a tiny iPod that starts at €79 and a bargain computer the size of a paperback book.

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 Mac mini computers go on sale in the US on January 22 and represent Apple’s first foray into the budget desktop PC arena, which has been largely confined to personal computers that rely on Microsoft’s Windows operating system.

Smaller than even some stand-alone external computer drives, they lack a monitor, mouse and keyboard. The 40-gigabyte Mac mini will cost €393 and an 80-gigabyte model €472.

They ship 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.

“People who are thinking of switching will have no more excuses,” Apple Computer chief executive Steve Jobs told devotees during a keynote speech at Macworld Expo. “It’s the newest and most affordable Mac ever.”

Apple has just a 3% share of the US computer market, and company executives say they’re aiming with the Mac mini to woo PC users who may have felt Apple products were too high-priced.

“This is also a great second or third computer in the home,” said Jon Rubenstein, an Apple senior vice president.

The iPod Shuffle, on the other hand, while holding far fewer songs than Apple’s hard drive-based music players, seeks to build on the company’s heady success in the portable music business while appealing to people seeking flash memory-based players, which are more durable and lightweight than those using hard drives for storage – and thus better suited as exercise partners.

The Shuffle is smaller than most packs of chewing gum, weighs less than an ounce and is a third of an inch thick.

Unlike its larger cousin, the iPod mini, the Shuffle lacks a display. There is a scroll wheel for the controls so stored songs can either be played sequentially or automatically shuffled in random order.

Apple is selling two versions of the iPod Shuffle. The smallest-capacity model will have 512 megabytes of storage, which holds up to 120 songs, and costs €79 in the US. A one-gigabyte version, which holds up to 240 songs, will sell for €114.

Until yesterday, the lowest cost iPod was the mini, at €193 for four gigabytes - enough to store about 1,000 songs.

Like other iPod models, the new players are designed not to play songs purchased from online music stores that compete with Apple’s iTunes.

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.

Jobs said Apple sold 4.5 million iPods in the fourth quarter and more than 10 million since its debut in October 2001. He says Apple holds 65% of the hard drive-based portable music player market but just under a third of the total market.

Analysts expect the new iPods will help Apple hold its lead in the MP3 market.

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 €193 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.”