“Current speculation among the Mac-obsessed is that Apple Computer will unveil a new, inexpensive Macintosh computer for $499 at its annual trade show. The new computer, described as a compact box as slender as 1.73 inches high, would ship without a monitor, according to the buzz,” Dawn C. Chmielewski reports for The Mercury News.

“By Thursday, Piper Jaffray analyst Gene Munster lent credibility to the speculation, saying Apple might unveil a $500 iMac at Macworld. He wrote that it would appeal to consumers who are considering a switch from Windows PCs to the Mac platform — but not for a comparatively pricey investment of $1,299, the cost of the least expensive iMac desktop computer,” Chmielewski reports. “Shaw Wu of America Technology Research agreed that a low-cost Mac is likely under development. An econo-Mac would be marketed to Windows users who are looking for an inexpensive second computer that they could use with an existing monitor and other peripherals, such as printers or digital cameras. It would likely ship with Apple’s iLife suite of software for managing digital photos, music collections and movies. ‘We believe a low-cost Mac makes great sense for Apple as price appears to be the key reason why more users have not migrated to the Mac platform,’ wrote Wu. ‘Lower price points could create more ‘switchers.””

Chmielewski reports, “Other analysts say a budget Mac is too radical a departure for Apple. Apple, after all, is the computer industry’s version of BMW — a luxury brand for consumers who’ll pay more for sleek design and performance. ‘I’m not convinced that they could do an entry-level product, at that kind of entry-level price, very well,’ said Stephen Baker, director of industry analysis for the researcher NPD Group. ‘They’d have to take too much out of it, and make it not very worthwhile. I’m not sure how they’d market it. It’s not the kind of thing this company does. Does anyone tell BMW they need to have a $14,000 car?’”

Full article here.