Quite naturally we are all looking for the other shoe to drop. Apple undoubtedly has some big plans for Digital Music that move beyond the iPods reach.

A low cost headless box is probably just what they need right now. It surely won't hurt eMac sales enough as AIO are preferred by many in edu environments.

This is just the beginning. I could see this device evolving quite nicely over the next few years.

Interesting that ML has pointed out something that I think all of us know: that it will take Apple to do the Digital Living room right!

Sure, TiVo exists, but so did many MP3 players before the iPod.

Setting up an iPod division has a lot more to do with just an MP3 player...

The one thing I haven't seen yet is anything about a matching display for the headless Mac. Does anyone believe that Ives would design a $500 Mac without designing a matching display?

That leaves open the potential of a headless Mac plus the potential for a "package deal" that includes a wide screen display - probably 17".

The digital living room, for me, is software based and I believe that Apple will move more in this direction across the board. The less expensive Mac (as well as a less expensive flash iPod) opens the Apple lines to a very large group of people who cannot afford the current offerings. I think that is the factor - opening up lower price points for those that need them to join the Apple world.

"Citing the cost of a 17" LCD now near $400 and the basic eMac at $799, he says Apple could sell a headless iMac for under $500 without hurting its profit margins. "

Has this guy ever seen an eMac? - How can you discuss this topic with LCD prices when the eMac features a CRT which is what? - 50 bucks?

Your financial assessment is a bit off if you think the eMac has a LCD. The other poster is right - the CRT installed in the eMac is worth certainly less than $100. Using the same logic Apple should be able to do a $699 headless Mac without hurting any. My guess is they will try to be a bit more agressive.

On the other hand Apple isn't know for "giving" away anything or doing things on the cheap. They have never been interested in keeping pace with PC manufacturers on price. The iPod is no different - you'd be hard pressed to find a more expensive portable HD player out there.

Based on this I'd be shocked if this new computer comes in under $500 - it just wouldn't fit Apple's profile. I'm guessing Apple would consider $599 highly agressive and I can definitely see Steve Jobs trying to push $699 as a major breakthrough price, even though it's not.

I have a question. What does it take to work at Merrill Lynch? I mean, it seems like the guys basically saying pretty much what everyone on these boards have been saying. Does that mean he just reads and recaps? Or could any one of us do his job?

Well, I take that back. We all would do a better job with the whole "LCD" and "eMac" business.

If financial analysts are picking on this rumour, then Apple will either have to deny it or to release the thing. They won't be able to stay quiet as it might affect their share price...