Low-priced Computer and iPod, Quarterly Profit Spike for Apple

As Apple Computer's annual Macworld Expo got into full swing, the company unwrapped a bargain-priced personal computer about the size of a paperback book, an iPod about the size of a pack of Wrigley's Spearmint gum, and reported over quadruple first-quarter earnings for its fiscal 2005.

The new Macintosh mini-computer – with a 40GB hard drive model at $499 and an 80GB model at $599 – hits the market January 22, as Apple's first move into the budget desktop market, and will ship with Mac OS X Panther plus the newest edition of its iLife digital media software suite, chief executive Steve Jobs announced at Macworld January 11.

"People who are thinking of switching will have no more excuses," Jobs told the gathering. "It's the newest and most affordable Mac ever." Senior vice president Jon Rubenstein said the mini-Mac could also make a perfect second or third computer in the average computer family's home.

The new tiny iPod, being called the iPod shuffle informally, is aimed at people looking for flash memory-based music and media players, since those are believed more durable and lighter than those using conventional hard drives.

It weighs under an ounce, is less than an inch thick, will have 512MB of storage (up to 120 songs), and will retail for $99, while a 1GB version (up to 240 songs) will retail for $149, Apple said.

In a related development, Apple quietly issued an iTunes update which repairs a security flaw found in both the Windows and the Mac OS versions. The bug caused buffer overflows, when common m3u and .pls files were played, that could crash the player and launch malicious code on user systems, Apple said.