SAN FRANCISCO – Apple Computer Inc. (AAPL) on Tuesday introduced an iPod "Hi-Fi" home stereo system shaped like a speaker set on its side as it seeks to broaden the reach of its market-leading portable music player.
Chief Executive Steve Jobs said the semi-portable stereo, which is about the size of a long shoe box, was compatible with all versions of the iPod and sells for $349.
Apple is far and away the leader in digital music players, with nearly 62 percent of the U.S. market for MP3 players in the fourth quarter of 2005, up from 52 percent in the year-earlier quarter, according to market research firm NPD Group.
But rivals are increasingly looking to grab a bigger share of the so-called iPod economy, and Apple's newest product marks an attempt to tighten the company's grip on the booming market for digital music machines and accessories for the devices.
Shares of Apple, which had said it would make an announcement, were down about 3.2 percent in late afternoon trade. The Nasdaq Composite Index was off about 1 percent.
Apple also said it would begin selling its own leather cases for the iPod in mid-March for $99.
Since the IPod's introduction in October 2001, Cupertino, California-based Apple has sold more than 42 million of the sleek devices, with about a third of that total coming in the fourth quarter of 2005. iPod sales accounted for 51 percent of the company's $5.75 billion in revenue in that quarter.
The new home stereo unit is a 17-inch-wide white box about 7 inches high by 7 inches deep with a black grille.
Any iPod can be slipped into a dock on top of the unit, which also has a remote control and built-in handles, and can run on D-cell batteries. With the required six batteries, it weighs 16.7 pounds, Apple said.
Apple also introduced on Tuesday a new Mac mini computer with an Intel Corp.(INTC) microchip as much as three times faster than the previous version. A Mac mini with a dual-core Intel chip, which is essentially two chips merged into one, was nearly five times as fast as the previous version.
The Mac mini is Apple's entry level machine aimed at people who already have a computer or are thinking about replacing one because it is sold without a monitor, keyboard or mouse.
Jobs said a mini with a single-core chip sells for $599 while the machine with the dual-core chip retails for $799.
The new products come as Apple is moving its entire lineup of Macintosh notebook and desktop PCs and servers to Intel microprocessors by the end of 2006.
At the Macworld conference in January, Jobs unveiled the MacBook Pro notebook and the iMac all-in-one desktop PC, both of which use Intel's chips and related elements.
Shares of Apple were trading at $68.70 on Nasdaq.