Mini iPod heads downmarket

Apple CEO Steve Jobs kicked off Macworld Expo on Tuesday by announcing a smaller iPod music player, new multimedia software and an update to Microsoft's Office package.

The "iPod Mini," which uses a new generation of tiny hard disks, holds 4GB of storage - or about 1,000 songs - in a half-inch-thick case the size of a business card. The device, which will cost $249 and come in a choice of five colours, will be available in the US in February and worldwide in April.

"We've got a lot of things on the way," he said, wearing his trademark black mock turtleneck and blue jeans. "It's going to be a great 20th anniversary year."

This is a critical period for Apple, which has now branched out from its focus on personal computers to a broad range of multimedia software and hardware, all designed to be used with the PC as the hub. But Windows-based machines are quickly catching up on several multimedia fronts that Apple has dominated, despite its small market share.

On the iPod front, "Apple is going to have instant competition," said Tim Bajarin, president of research firm Creative Strategies.

Digital Networks North America (maker of the Rio line), Creative Labs and Archos all offer 20GB players in the mid-$200 range, for example. That price is equal to the iPod Mini, which holds one-fifth the data, and cheaper than the $399 Apple charges for a 20GB iPod.

Nor will the iPod mini be without competition. On Monday, Digital Networks said it will release a 4GB Nitrus player, and others are on the way.

Still, Bajarin said the iPod Mini's interface and design would attract buyers.

Expo attendee Monique Krauer-Redmond, who works on information technology for biotech firm Genentech, agreed. "I like the size; I like the weight" of the mini player, she said. "I want to get an iPod - it just made the decision harder."

But another attendee, Chico State University student Jeffrey Cutter, thought the price could be a deterrent. "It's pretty cool, because it's small," he said. However, "it's still too pricey."

Meanwhile, rivals of the company's successful iTunes song store are popping up at the rate of several per month, and Windows computers are increasingly being used for a wide range of multimedia applications, from powering home entertainment centres to recording professional quality music.