Apple seeks bigger bite of PC market with Mac Mini

South Korean promoters show the new Mac Mini and the iPod Shuffle during its unveiling press conference in Seoul on January 20. Apple Computer Korea sells the new Mac Mini personal computer at USD 499 and the iPod Shuffle MP3 player for USD 99 from February in South Korea. PHOTO: AFP

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, respectively.

"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 course.

"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.

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."