Apple has unveiled a tiny Macintosh computer with a tiny price - starting at less than €519 including VAT for a 40 gigabyte computer the size of a small bag of flour - and a tiny new iPod called the Shuffle, starting at €99.

Apple is aiming the Mac Mini squarely at Windows computer users, hoping to convert some of the huge user base of its successful iPod digital music player, a product that has given Apple new international prominence, to Apple computers as well.

"We want to price this Mac so that people who are thinking of switching have no more excuses," said Apple chief executive Mr Steve Jobs during his annual keynote speech at the MacWorld show in San Francisco yesterday, broadcast to press and customers in Paris. "This is the most affordable Mac ever."

The Mac Mini - available in the US on January 22nd and worldwide a week later - comes without a monitor, keyboard or mouse.

However, it can be used with any make of these items, which means Windows users could simply plug their existing equipment into the Mac Mini.

The little computer, which has a combination DVD and CD drive built in, and runs on a 1.25 GHz G4 processor, comes in a box that is little larger than a lunchbox.

Rumours had been circulating for weeks that Apple would introduce a new entry-level Mac in an attempt to increase its small computer market share, currently less than 5 per cent of the market.

Sales of iPods - which can be used with Windows machines - far outstrip sales of Mac computers.

The pricing of the new Mac Mini will make it cheaper than almost all models of iPod, which retails in Ireland for €659 including VAT.

Apple will report its latest financial results today.