Apple Computer is set to unveil its revolutionary consumer laptop next week, which will combine cutting-edge design with new engineering techniques in a package priced below the company's existing PowerBook range.

An industry analyst who has been briefed by Apple engineers says the machine, pitched at students and home users, will be introduced by Apple interim chief executive Steve Jobs at the MacWorld exhibition in New York next Wednesday.

Despite speculation last month that the project could be cancelled because of technical problems, it is now thought the new machines could go on sale in the US in September, and be available in the UK before Christmas.

Richard Doherty, director of research at the Envisioneering Group in New York, told OnLine the new machine will deliver "most of the Macintosh Powerbook experience, in a much more affordable, economical, lighter and durable package".

The price of the machine, thought to have a 12 inch screen, is not yet known, although it is expected that Apple will be aiming to compete with the $1,700 (£1,062) notebooks currently on sale. Prices could fall as demand increases, bringing the new machines into the price range of the sub-notebook market currently dominated by Windows CE devices.

"Our ongoing research with consumers and business professionals alike shows that should the PowerBook be delivered in this new portable, it will appeal to many users who have turned to Windows CE devices, because it will have more PC final functionality, and compatibility, than many of the $800 - $1,000 notebooks that are out there," says Doherty.

At the heart of the portable will be a new technology to put most of the computer's components on a single chip -a feature which Doherty thinks will not be widespread in the PC world "for some time".

He adds: "To get improved battery life and processing power, Apple has engaged in a massive re-engineering of the electronic componentry inside, which will also allow them to price it for consumers and for some organisations, who will order these in lieu of PC or even Powerbook products.

"Almost everything but the processor has been put into a single chip, which reduces the cost and raises the reliability, while reducing the power it needs.

"That's very hard for the PC community to do, because when there is too much chip integration, especially by a company like Intel, people say that's too monopolistic. But for Apple, with just under 10% market share worldwide, it's just plain good business sense."

News of the announcement comes as Apple is about to reveal its second quarter results. These are expected to show that Apple has managed a seventh successive profitable quarter.

The company has now completed the first stage of a re-alignment led by co-founder Jobs, who returned to Apple mid-1997 as it bled red ink and fussed over a large and fault-ridden range of products.

He set about reorganising the company, abandoning unprofitable projects and focusing Apple on four key areas: corporate desktop and portable machines, and domestic desktops and portables. The resultant G3 range of desktop machines and sleek new high-end Powerbooks have revived Apple's reputation in the corporate market and halted Apple phase-outs in key areas like publishing and education.

But by far the most interest has been in Apple's answer for the domestic desktop market: the iMac. Launched this time last year, the comparatively cheap, colourful, all-in- one computer quickly became the US's top selling computer by taking Apple back to its original message - computers for the rest of us.

Using that message, it effectively targeted a new generation of "non-nerd" computer users, while still offering respectable technical specifications.

Building on that success, the company is expected to unveil the next generation iMac in time for the Christmas rush, which will sport a faster processor and larger screen.

There have also been suggestions the company may produce Apple-branded Palm V handheld computers in iMac-matching colour schemes.

That will be Apple's first dalliance in the handheld market since Jobs killed off the flawed and unprofitable Newton project.