TELECOM Digest OnLine - Sorted: Apple Seeks Bigger Bite of PC Market with Mac Mini

Apple Seeks Bigger Bite of PC Market with Mac Mini

Lisa Minter (
22 Jan 2005 08:08:53 -0800

SAN FRANCISCO (Reuters) - Might the Mac mini mean a bigger bite of the
personal computer market for Apple Computer Inc.

That's the hope of Apple whose approximately 100 retail stores are
opening an hour early on Saturday as the highly touted and low-priced
Mac mini computer and iPod Shuffle portable music player go on sale.

Analysts are betting Apple's mini might just tempt users of rival
Microsoft Corp.'s Windows to switch operating systems and go with the
Mac and its Mac OS X operating system.

That transition hasn't happened yet despite Apple's "Switch"
advertising campaign and in spite of the success of the iPod portable
digital music players. More than 10 million have been sold since their
introduction more than three years ago. Apple's portion of the
worldwide PC market was 2 percent in the fourth quarter, according to
preliminary figures from market research firm IDC.

"I believe the Mac mini is actually going to have more of an impact on
Apple's market share position than their digital music efforts have so
far," said IDC analyst Roger Kay.

Echoing the sentiment, Needham & Co. analyst Charlie Wolf wrote to
clients: "The iPod's only failure so far has been its inability to
stimulate meaningful purchases of Macintoshes."

With the Mac mini, that could change, and Wolf now estimates that 11
percent of those who have iPods and PCs that use the Windows operating
system may shell out the $499 for a Mac mini now that they're
available. Before the mini, Wolf had predicted 4 percent could switch.

Apple is opening its stores at 9 a.m. local time on Saturday. Store
personnel contacted by Reuters in California, Colorado, Florida and
New Jersey said they had been receiving a slew of calls about the mini
and the Shuffle.

The Shuffle is Apple's smaller, cheaper version of its market-leading
iPod and holds either 120 or 240 songs, costing $99 and $149,

"Some of this is true demand, but I think some of it's orchestrated,
too, by Apple," said Stephen Baker, an analyst at NPD Group.

Apple has long been criticized for pricing itself out of the
mainstream with its sleek products, but, now, Apple is changing

The Mac mini opens up lower price points for people who would like to
try the Mac platform, and that's long been one of my chief complaints
about Apple -- the high price," IDC's Kay said.

Steve Jobs, co-founder and chief executive of Cupertino, California-
based Apple, said last week, "People who are thinking of switching
will have no excuse." Jobs introduced the mini, which comes without a
display, keyboard or mouse, at the company's annual trade show on
Jan. 11.

Starting at $499, the mini, which is 6.5 inches square and 2 inches
tall, is Apple's cheapest computer ever.

Some analysts have said that Apple's blow-out fourth-quarter results
offered clear proof of the "halo effect" of iPod sales boosting Mac
sales. Kay said he was not so sure. <p> <p> Apple's fourth-quarter
share of the worldwide and U.S. PC markets rose by a mere 0.1
percentage point each, to 2.0 percent and 3.4 percent, respectively.
"That's not a whole lot of share gain, but will the Mac mini help them
gain some more?" Kay asked. "I would certainly think so."

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