Apple settles in at home

CUPERTINO, Calif. — Apple Computer took its first steps into the living room Tuesday, introducing a speaker system for iPods and a new Mac mini that can stream music, photos and video from other computers.

Together, the two products provide "a clear indication that Apple intends to expand more into the home and move away from its 'on-the-go' focus," said Gartner analyst Van Baker.

Unlike other PC makers — which have launched full computer systems designed to take their place in entertainment centers — Apple is taking a more cautious approach by slowly expanding the reach of one of the world's most recognized devices.

The iPod holds 78 percent of the digital music-player market. Apple co-founder and Chief Executive Steve Jobs said iPod owners needed a top-notch sound system to share their music.

"People's music is not in CDs in cabinets anymore, it's in iPods," Jobs said. "So it's time to get the same high-quality listening experience as a great home-stereo system."

The iPod Hi-Fi, the size of a typical boombox stereo player, is a high-quality speaker system with an iPod dock on top that sells for $349.

All white with a black speaker face, the iPod Hi-Fi has two custom-designed wide-range speakers and a low-vibration bass system, and is operated by Apple's palm-sized remote control.

"It's extraordinary sound for the price," said Baker.

The new versions of the Mac mini, Apple's smallest computer, run on single-core or dual-core processors from Intel and are up to five times faster than previous Mac minis.

Apple is switching all its computers to Intel processors by the end of this year, from those made by IBM and Freescale Semiconductor, because it says they perform better.

The Mac minis, which will sell without keyboards or monitors for $599 and $799, come with a technology called "Bonjour," which allows them to access audiovisual content on other computers on the home network, whether they are Macs or PCs that use Microsoft's Windows operating system.

Now that the iPod rules among portable MP3 players, "we want to put the focus on music in the home," said Greg Joswiak, Apple's vice president for iPod marketing.

The new offerings will allow Apple to take back some of the money that has been going to the lucrative market of accessories developed by third-party vendors who sell cases, microphones, car adaptors and other gadgets.

"It appears Apple is trying to directly capture more of the revenue that is being generated by the 'iPod economy' that the company has created," Piper Jaffray analyst Gene Munster wrote in a report to investors.

All the products are available now.

The iconic iPod has fueled Apple's growth in recent years and led to a booming industry of accessories ranging from speakers to clothing, as well as an increasing number of cars that come equipped with iPod-ready stereo systems.

Indeed, Apple has become the pacesetter for digital media products, and the company's shares have more than doubled in the last year amid lofty expectations for ever more innovative products and services.

Apple has sold more than 42 million iPods since the original product debuted in 2001. The online iTunes Music Store sold its billionth download last week.

As some rivals failed to gain traction and pulled out of the portable media player market, Apple saw its share in the U.S. grow to more than 72 percent in 2005, up from 56 percent in 2004, according to the NPD Group.

But a key competitor, Microsoft, isn't backing down.

Microsoft confirms it is planning an "ultra-mobile PC device," code-named Origami.

The company plans to release information incrementally through the Web site www.origamiproject.com, with the next tidbit expected Thursday.

Information about availability, iPod growth and rivals' plans provided by The Associated Press.