Analysts are returning overall favourable reaction to Apple's product introductions at Macworld Expo.

The company launched its first sub-£400 Mac, the Mac mini at the show, in addition to the £69-£99 iPod shuffle. And, while iPod shuffle is exciting, it's the Mac mini that has the analysts excited - as it may drive happy Windows-using iPod fans to switch in manifestation of the 'halo effect'.

Jupiter Research analyst Joe Wilcox stressed that effect: " Apple might even increase market share," he urged caution on expectations of how much by, citing the huge, entrenched nature of the Windows market.

"If the mass-market strategy succeeds and ekes out even a few percentage points of share, the significance could be huge for Apple," he told Silicon Valley news.

'Nothing short of brilliant'

The Chicago Sun-Times cites a research report from analyst Darcy Travlos of Caris & Co., who called the new items "nothing short of brilliant."

"New products will contribute positively to both revenue and margins," he said, "Apple is in front of the curve."

Merrill Lynch analyst Steven Milunovich told Forbes he believes both products will achieve success for Apple: "We continue to think Apple is building a sustainable consumer electronics franchise," he wrote, confirming his belief that the Mac mini will please diehard Mac fans and Windows switchers alike.

Halo myth becomes reality

A Piper Jaffray analyst told the SunHerald that Apple's results confirmed that the 'halo effect' is a reality. "The net of all that is the company's in the best position they've been in in 20 years to pick up market share,'' he said.

Shaw Wu, an analyst with American Technology Research told teh SunHerald that Apple quietly also added $1 billion in cash to its reserves in the first quarter: "After we ran the numbers through our model, that was the big surprise,'' Wu said. "They generated nearly a billion dollars in cash. A lot of companies can't do that their whole lifetime.''

Apple's business operations are less dependent now than ever on hardware sales. Its digital music businesses, including iPod and iTunes, accounted for about 40 per cent of the company's revenue in the first quarter. In its previous quarter these contributed 27 per cent of sales.

Changing business model

Technology Business Research analyst Tim Deal described this as an "evolution" for the firm. "Apple is becoming less of a computer equipment maker and more of a consumer electronics firm", he said.

Credit Suisse First Boston analyst Robert Semple told Forbes he believes Apple's announcement of a low-end desktop PC, "will enable the company to at a minimum hold market share in the future,"

He warned that because the Mac mini is so competitively priced, "the economics of the product may be below its corporate average, but we believe on a longer-term basis the Mac mini allows the company to better compete with a broader product portfolio."

Apple executives also warned Wall Street not to expect stellar quarters every quarter, pointing out that the introduction of two low-priced products makes it hard to predict results in the rest of the year. "It's too early to gauge demand", the company said.