Apple rolls out new iPod home stereo box, Mac mini

Duncan Martell

CUPERTINO, Calif.: Apple Computer Inc. on Tuesday introduced an iPod "Hi-Fi" home stereo system shaped like a speaker set on its side as it seeks to broaden the reach of its market-leading portable music player.

Chief executive Steve Jobs said the portable stereo, which is about the size of a long shoebox, was compatible with all versions of the iPod and sells for $349.

But Apple shares fell 3.5 percent after the announcement. Prior to it, there was speculation that a higher-end video iPod and iBooks with Intel chips might be in the offing.

Apple is far and away the leader in digital music players, with nearly 62 percent of the U.S. market for MP3 players in the fourth quarter of 2005, up from 52 percent in the year-earlier quarter, according to market research firm NPD Group. In the first quarter, Jobs said, that figure has gone up to 78 percent.

But rivals are increasingly looking to grab a bigger share of the so-called iPod economy, and Apple's newest product marks an attempt to tighten the company's grip on the booming market for digital music machines and accessories for the devices.

The iPod Hi-Fi is also the latest example of the Cupertino, California-based company's efforts to extend the umbrella of its Mac computers, which Jobs has since 2001 positioned as the center of the "digital lifestyle."

"Apple is taking steps to move their brand to other rooms beyond just the Mac," said analyst Tim Bajarin of research firm Creative Strategies of the Hi-Fi. "It's no longer just sitting in the den."

Shares of Apple, which had said it would make an announcement, closed down $2.50, at $68.49. The Nasdaq Composite Index fell 1.1 percent as U.S. stocks overall fell.

$99 for an iPod leather case



Apple also said it would begin selling its own leather cases for the iPod in mid-March for $99, available for the iPod Nano and the current, fifth-generation iPod.

Since the IPod's introduction in October 2001, Cupertino, California-based Apple has sold more than 42 million of the sleek devices, with about a third of that total coming in the fourth quarter of 2005. iPod sales accounted for 51 percent of the company's $5.75 billion in revenue in that quarter.

The new home stereo unit is a 17-inch-wide white box about 7 inches high by 7 inches deep with a black grille. The iPod can be slipped into a dock on top of the unit, which also has a remote control and built-in handles, and can run on D-cell batteries. With the required six batteries, it weighs 16.7 pounds, Apple said.

"It's really home stereo reinvented," Jobs said at an event at the company's headquarters to launch the products. He described the products as "sort of medium-scale things."

But the box would also put Apple in direct competition with companies such as Bose, which already have external speakers for iPods and other accessory products.

Apple also introduced on Tuesday a new Mac mini computer with an Intel Corp. microchip as much as three times faster than the previous version. A Mac mini with a dual-core Intel chip, which is essentially two processors on a single piece of silicon, was nearly five times as fast as the previous version.

The Mac mini is Apple's entry-level machine aimed at people who already have a computer or are thinking about replacing one because it is sold without a monitor, keyboard or mouse.

Jobs said a mini with a single-core chip sells for $599 while the machine with the dual-core chip retails for $799.

The new products come as Apple is moving its entire lineup of Macintosh notebook and desktop PCs and servers to Intel microprocessors by the end of 2006.

At the Macworld conference in January, Jobs unveiled the MacBook Pro notebook and the iMac all-in-one desktop PC, both of which use Intel's chips and related elements.

(Additional reporting by Michael Kahn in San Francisco)