Apple TV gets a do-over

Apple's Midas-like touch with technology is the stuff legends are made of. While they're greatly outnumbered by Windows-driven PCs, Apple laptop and desktop computers enjoy near-cult status among their users. The Apple iPod MP3 player is ubiquitous, while the iPhone and iPad are objects of desire that generate block-long lines when new models are released. Then there's Apple TV.

Apple's set-top box for streaming content (mainly from iTunes) to your TV seemed to be neglected and unloved by both the public and Apple itself. That changed on Wednesday as a re-imagined Apple TV got the "one more thing" treatment from Steve Jobs at the company's big product-announcement shindig in San Francisco. But will the changes be enough to get Apple TV over the hump and into the mainstream?

Smaller, cheaper, and more capable

The new Apple TV is a complete makeover from the current version. It's tiny at just under 4 inches square and  under one inch thick. its retail price of $99 is also significantly less expensive. TV show rentals have been cut to 99 cents, while new-release movies (same date as their DVD/Blu-ray releases) will run $4.99.

However, unlike the original Apple TV, you won't be able to own and store TV shows or movies; instead the revamped Apple TV is a pure streaming device. Terms are similar to other pay-per-view streaming providers, such as Amazon Video on Demand (you can find out more about Amazon Video on Demand in our report on movie downloads). You have 30 days from your purchase to watch a TV show or movie, then can watch as many times as you want for the next 24 hours.

While iTunes continues as the primary content provider, it's not the only one. Apple TV also brings Netflix, YouTube, MobileMe and Flickr to the table. Users can also stream content from networked computers (via iTunes). Despite speculation that Apple TV would run the iPhone operating system (iOS), that capability is not on board, at least at launch.  The new Apple TV is pegged to ship by the end of September.

Not all are impressed

So, will buyers line up to buy the new Apple TV? MSNBC.com quotes technology analyst Michael Gartenberg as saying that the revamped device "is to television what iPhones were to phones three years ago." He adds that it sets the stage for "mass market adoption." Linda Holmes at NPR sees positives and negatives, and adds that "the history of Apple suggests that whether what it's offering is especially novel or helpful or not, the company is pretty good at getting its customers on board."

Others aren't so sure. One of the big issues cited by many critics is the limited content available via iTunes. For example, at launch, only ABC and Fox are on board from the major broadcast networks. The Hollywood Reporter says that others (including Viacom, CBS, NBC Universal, and Warner Bros) are reportedly balking over worries that the low 99-cent price will cut into other revenue streams, such as DVD rentals. That leads PCMag.com's Sascha Segan to complain that the problem with Apple TV continues to be that "there's not enough stuff to watch."

The competition strikes back

Regardless of whether Apple TV V2.0 will be a hit, streaming video providers and set-top box makers have taken notice, and at least one has also taken action. The Wall Street Journal reports that Amazon Video on Demand, which normally charges $1.99 for streaming TV episode downloads, has cut the price to 99 cents for content from ABC and Fox. The company is also said to be exploring a subscription-based movie streaming service similar to the one offered by Netflix.