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NEW APPLE COMPUTER RIDES IPOD HALO EFFECT

Latest Marketing Strategy Appears to Target Low-End PC Market

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YORK, Pa. (AdAge.com) -- In a bid to both push and take advantage of the Apple iPod "halo" effect, Apple today unveiled the Mac Mini, a Macintosh CPU
As small and compact as a traditional external hard disk unit, the new Mac Mini is a full-powered G4 that comes with Apple's iLife software suite that supports digital music, photo and video functions.

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unit without keyboard, monitor or mouse that sells for under $500.

New strategy
The uniquely small machine marks a new strategy for a computer maker whose products have always been more highly priced then the commodity PC/Windows products that have dominated the market. But now the new 40-gigabyte Mini has the potential to compete in the same low end of the U.S. market where Apple has long had a minuscule 3% share.

A key element of the new Mini strategy is an architecture that supports low-priced generic PC monitors, keyboards and mice.

New iPod model
While introducing the new CPU at his MacWorld keynote address today, Apple CEO Steve Jobs debuted a smaller version of the wildly popular iPod, called the iPod shuffle. He also previewed a new TV ad with the theme "Life Is Random," designed to promote the 512-megabyte and 1-gigabyte versions of the iPod priced at $99 and $149, respectively. The ads were created by Apple's agency, Omnicom Group's TBWA/Chiat/Day of Playa del Rey, Calif.

Riding iPod popularity
Some analysts applauded the moves as good ways to capitalize on the success of the iPod by reaching out to fans with economical, while still compatible, computers.

Other analysts were more reserved, citing Apple's entry into the already saturated PC and flash music player markets as a gamble.

"The idea is that people get so excited about the iPod that they'll go out and buy Apple computers," analyst Rob Enderle said. "But a better connection with iPod would be a media hub kind of product rather than a general PC hub."

10 million iPods sold
Mr. Jobs told conference attendees that more iPod deals with car manufacturers are in the works, including Mercedes, Volvo, Nissan, and Ferrari. Apple's only automotive partner so far is BMW. He also said 4.5 million iPods were sold in the fourth quarter, with the 10 millionth one sold Dec. 16, a unit he kept for himself.

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