Apple Can't Spoil Microsoft's Home Invasion

The new Mac mini, the cheapest Macintosh computer ever, may be big news for Apple(AAPL Quote), but it's still small potatoes in the world of Microsoft(MSFT Quote).

That said, Apple's latest offering, unveiled Tuesday at Apple's annual MacWorld confab, could still keep Microsoft on its toes as the world's largest software maker continues to fight for a greater presence in consumers' living rooms.

"It's definitely an interesting development that I think will have a definitive effect on [Apple's] shipment volumes," said Alan Promisel, a personal computing research analyst with IDC. But "I don't think at the end of the day it challenges the dominance of Microsoft."

The Mac mini could help Apple nab a few more percentage points of market share of worldwide PC sales, translating into a substantial revenue jump for the Cupertino, Calif.-based company. Apple accounted for a tiny 1.9% of worldwide PC sales and 3.3% of U.S. PC sales in the third quarter, according to IDC.

However, with Microsoft systems commanding more than 90% of the PC market, losing a few percentage points to Apple is unlikely to mean much for the world's largest software maker, Promisel said.

The market for the Mac mini is likely to be largely consumer-driven, including both iPod and non-iPod users who own a Windows-based PC and are wondering about the Mac, as well as Mac users looking for another computer in a different room of the house. For the first category, buying a Mac mini is largely a "why not?" decision, given its price tag starts at only $499, said Joe Wilcox, a senior analyst with Jupiter Research who covers Microsoft.

"I see the potential to be very significant for Apple but the consequences to be insignificant for the larger Windows marketplace," Wilcox said.

However, Wilcox said the Mac mini could pose a disruption to Microsoft's efforts to extend its reach into the home, most notably with its Media Center PC operating system. That could happen if Apple can successfully capitalize on the success of its wildly popular iPod digital music player by convincing a few million iPod users to buy a Mac mini for their living room, noted Wilcox.