Is There Hope for the Apple TV?
The Apple TV, after garnering some initially positive press, has faded into obscurity. Apple won't even release sales numbers for the tiny device, and Steve Jobs recently dismissed it as a "hobby."
So what happened? Apple usually has unprecedented success with its consumer electronics, and has a knack for creating a market where one didn't previously exist. But the Apple TV did not find much of an audience beyond die-hard Apple fanatics and the hacker/tinkerer crowd.
The failure of the Apple TV can be attributed to a number of decisions by the boys in Cupertino:
It's not that Apple didn't push the product, but more that they didn't explain it properly. The Apple TV is not a proper set-top box or a smaller Mac Mini. Essentially, it's a stationary video iPod with a hefty set of restrictions.
Apple TV didn't come with cable to connect to your TV.
It may seem like an odd complaint, but Apple is known for shipping products that work right out of the box. If you have to buy a $30 HDMI cable to make the thing work, it's betraying Apple's "it just works" ethos.
Apple TV requires an HDTV.
While HD is invading American homes at an incredible rate, Hi-Def sets are far from ubiquitous, limiting the device's appeal from the outset.
Apple TV lacks media support.
Sure, you can load up just about any audio file (other than Ogg or WMA) or photos of your choice, but the Apple TV's main selling point was its video capabilities -- where it undeniably fell short. The Apple TV is limited to lower-resolution MPEG 4 and H.264 video files such as those available through the iTunes store. These formats are nowhere near a high enough resolution to look passable on the fancy HDTV required to use the box. No DivX, no Xvid, no WMV. In fact, the Apple TV isn't even capable of handling the HD trailers hosted on the Apple Movie Trailers web site. Basically if you didn't buy shows and movies on iTunes and don't want to watch YouTube videos blown up to 1280x720, you probably have no reason to purchase the Apple TV.
A small community of intrepid hackers managed to add support for more formats, add USB storage expansion (a must on the original 40 Gigabyte model), and force the diminutive box to run both OS X and Linux, but homebrew enthusiasts alone cannot float an entire market segment.
Is there hope for the Apple TV? Probably not. At least not in its current iteration. Dropping the HD requirements would be a start, but simply building a more open and capable streamer is the only way to reinvigorate interest in the device. The Apple TV might be significantly cheaper, but we'd strongly recommend you drop the extra couple hundred bucks on a Mac Mini and an adapter for your TV -- you'll be much happier with the results.