Apple Ready with $500 PC for iPod Users

Apple Ready with 500 PC for iPod Users
Steve Jobs, Apple's chief executive, is planning to use the iPod's phenomenal success as a springboard into the budget computer market.

Apple is reported to be preparing to unveil a low-price home computer that will retail in America for less than $500 (�260). It will be aimed at PC users who might be attracted to buying Apple's iconic music player, but who have concerns over compatibility. At present, Apple's entry level computer costs around $800 in the United States and around �550 in Britain.

The development of a cheaper Apple computer would also seek to build on the "halo effect" observed by a number of IT industry analysts, where iPod users opt to replace their PCs with Apple computers having being drawn to the brand by the music player.

According to Think Secret, the Apple users' website, the new Mac is code-named "Q88", and will be sold without a screen. It is to be revealed at an exhibition on January 11.

The iPod was launched in October 2001 and, in common with many Apple products, immediately won plaudits from tech aficionados for its sleek design. Sales have accelerated, reaching 2 million and $537 million in the third quarter of 2004, with that figure expected to double over the Christmas quarter. Such has been the explosive demand, Apple has been reported to be struggling to fill iPod orders.