By Kasper Jade

Published: 10:35 AM EST (07:35 AM PST)

After returning from yesterday's media event in Cupertino, analysts for American Technology Research said they were a bit "underwhelmed" with Apple's product announcements and now believe the company is making less visible progress in building a broader digital entertainment portfolio.

"At first, we felt a little underwhelmed with the product announcements [...] due to our expectation of more announcements," analyst Shaw Wu wrote in a research note distributed to clients on Wednesday. "But after morecareful thought and consideration, we believe Apple is making less apparent progress in building a broader digital entertainment portfolio with both its Macs and iPod+iTunes franchises."

In the analyst's view, the new Mac mini has evolved into a competitive compact entertainment center with faster Intel processors, giving it processing muscle previous PowerPC G4 processors didn't deliver. "In addition, to us it screams connect me to a TV with the inclusion of a remote control, Gigabit Ethernet, Wi-Fi, Bluetooth, DVD burner, enhanced Front Row software with Bonjour file sharing and streaming, and more robust display options (DVI, VGA, S-video and composite video output)," Wu wrote.

He also believes the new Front Row software with Bonjour auto-discovery file sharing capability is further proof of Apple's commitment to leading the industry in ease-of-use. "Bonjour software capability essentially allows iTunes clients to 'auto-discover' one another, making a product like a Mac mini a more powerful entertainment hub," Wu wrote.

However, the analyst finds the dual-core Mac mini's price point of $799 to be a bit steep, and suggest the company add more features in the future including PVR recording and TV-tuner capabilities, which "would arguably make it the most powerful digital entertainment center on the the market. Still, he notes that comparable Windows PCs cost around $900-1400.

Interestingly, Wu said, the new Mac mini is the first Intel Mac to utilize Intel integrated graphics versus the ATI Radeon graphics processor used in the previous Mac mini design. He also points out that the previous PowerPC-based Mac mini appears to have been discontinued -- a positive indicator that Apple has tight control of its inventory levels.

Meanwhile, the analyst notes Apple's announcement of the iPod Hi-Fi indicates the company is entering into a product category that's proven to be a hit with customers -- the iPod speaker space.

"To minimize disruption, Apple is entering the mid-range segment with the $349 price point versus $99 at the low-end and $1000 at the high-end," he wrote. "The difference with Apple's product is that it is more integrated and focused on delivering quality and bass in a single package."

American Technology Research continues to believe that Apple's fundamentals remain sound and arguably among the strongest in technology. However, the firm notes that negative investor sentiment and the company's "weak technicals" may indicate further drops in share price.

"Absent of technicals, for longer term fundamental investors, we would take advantage of the pull-back to build and/or add to Apple positions," the firm said.

American Technology Research maintains a 'Buy' rating on Apple shares with a price target of $101.