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Little gadgets, big goals

Apple aims to boost market share with Mini computer, cheaper iPod

Apple Computer's chief executive, Steve Jobs, revived the company with a new motto: ''Think Different." Yesterday, Jobs unveiled a new low-cost computer and music player that suggest a new strategy: ''Think Cheap."

In San Francisco, at the annual Macworld trade show, Jobs showed off the Mac Mini, a cube-shaped computer priced at $499, and a new $99 version of the red-hot iPod portable music player.

''We want to bring even more people into the digital revolution," Jobs said.

For years, Apple's share of the personal computer market has hovered at a mere 2 percent, with nearly all the rest held by machines that use the rival Windows operating system from Microsoft Corp. Even an aggressive advertising campaign featuring disgruntled Windows users switching to Apple's Macintosh machines had little impact on Apple's market share.

But Apple's iPod music player has been one of the most successful consumer electronics products of the decade, and the most popular device of its kind. Apple has sold over 10 million since they were introduced in 2001; yesterday Jobs said the company sold 4.5 million during the Christmas holiday season alone.

Industry analysts said that by offering new, low-cost hardware, Apple is moving to preserve its dominance in music players while trying to win new customers for Macintosh computers.

''It's a strategic decision to bring more people into the Mac experience," said Tim Bajarin, an analyst with Creative Strategies Inc. in Campbell, Calif.

The Mac Mini's boxlike shape is reminiscent of the Mac Cube, a translucent machine that Apple introduced in 2000, at $1,800, a price that was steep for a personal computer aimed at home users. The Cube flopped.

The base model of the Mac Mini will come with a processor that's one generation older than the powerful chips found in more costly Macs. Its components are similar to those found in low-cost Windows PCs: 256 megabytes of memory, a 40-gigabyte hard drive, a CD burner that can play DVD disks, and a low-end graphics processor.

''We want to price this Mac so that people thinking of switching will have no more excuses," Jobs said. ''It's the cheapest computer Apple's ever offered."

However, Mac Mini purchasers will still have to buy a keyboard, mouse, and monitor, none of which is included. By comparison, computer systems based on the rival Microsoft Windows technology routinely sell for around $500 with monitor, keyboard, and mouse included.

Roger Kay, computer analyst for IDC Corp. in Framingham, said many people will gladly pay a little more to own a Mac, though. Windows computer accessories also work on a Mac, and mice and keyboards sell for $20 or less. ''You can get some sort of monitor for $100," Kay said. ''So for $600 you're in business."

Martin Reynolds, industry analyst for Gartner Inc., predicted the Mac Mini would sell well, but probably would do little to expand Apple's share of the desktop computer market. But considering Apple's tiny market share, even a little growth would be a major boost. ''If they can go from 2 to 3 percent, that's a 50 percent increase for them," Reynolds said.

The new iPod Shuffle is the first in the iPod line that won't feature a small internal hard drive that can store huge amounts of music. Instead, this iPod uses lighter and cheaper flash memory chips, the same technology used to store pictures in digital cameras. The iPods with hard drives can hold thousands of songs; the basic iPod Shuffle will hold about 120 songs. A $149 model will hold twice as many. But flash memory players are more durable, because unlike hard drives, they have no moving parts.

A host of companies have rolled out such players, attracting consumers who've been unwilling to part with a minimum of $249 for a standard iPod. Bajarin said that Apple wanted to win these price-conscious customers, hoping they will someday upgrade to more expensive iPods.

''They wanted to take that part of the market and become the major player as well," Bajarin said. ''That's designed to bring more people into the iPod economy."

Hiawatha Bray can be reached at bray@globe.com.

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