Analysts are positive about the possibilities of market share growth for Apple if the company introduces the rumoured flash based iPod and low cost Mac.
Creative Strategies analyst Tim Bajarin told Reuters: "A flash-based iPod would be going after what we'd call the low end of the market and could certainly bring more people into the Apple experience."
JPMorgan analyst Bill Shope estimates that Apple could double its market with a sub-$150 iPod. According to IDC, flash-based digital music players will account for nearly 51 per cent of the worldwide market in 2008.
Merrill Lynch analyst Steve Milunovich told Reuters that a lower-cost Mac "makes sense" as it "could encourage more consumers to switch from Windows-based PCs to the Macintosh".
In a note to clients Milunovich wrote: "Selling just the system unit would cut significantly the cost to switch. It would also expand Apple's digital living room strategy. Apple needs to build a strong digital consumer franchise based on more than iPod but using iPod as the lever."
Bajarin is more dubious about the introduction of a sub-$500 iMac as it is something Apple "could have done that at almost any point in their history." He sees logic in the idea only if the low-cost Mac has uses beyond those of the traditional PC.
Apple's share price was up just over 1 per cent last night at $63.94. Apple's shares are traded on the Nasdaq, which was down 2.6 per cent.