Apple launches Apple TV set-top box

Convergence device allows users to wirelessly play content from PCs on TV sets and is based on the popular iTunes digital media library

Apple joined the fray of vendors linking the TV and PC on Wednesday with the launch of its Apple TV, a set-top box that can wirelessly pull media content off a computer and play it on a television set.

The Apple TV can either stream content from PCs linked to a home wireless or Ethernet network or store that content on its 40GB hard drive. Either way, users can browse their networked digital media collections with an Apple remote control, treating the Apple TV like "a DVD player for the Internet age," according to a statement by Philip Schiller, Apple's senior vice president of worldwide product marketing.

Computer vendors have been trying for years to converge the TV and the PC, telling viewers that a combined device would empower them to interact with their favorite shows, view their personal media on a larger screen, and browse the Web while watching TV. Sony sells a convergence system based on its Vaio PC, while other PC vendors use platforms based on Intel's Viiv or AMD's AMD Live hardware bundles.

But consumers have been wary of polluting the reliable simplicity of their television sets with complex PCs that need frequent maintenance and take time to boot up. And some content providers don't trust DRM (digital rights management) systems enough to post their shows and movies on the Internet as seen in Viacom's move on March 13 to file a $1 billion copyright infringement lawsuit against Google for playing Viacom shows on the video-sharing site YouTube.

Apple hopes to beat those odds with a price of $299 and the simplicity of using its iTunes digital media library, made popular as the music store for the iPod portable music player.

However, that very simplicity may keep Apple TV from becoming a dominant product like the iPod, one analyst said.

"This is the first real end-to-end system that has the content, the software to handle that content, and the hardware the deliver the content to the end viewing platform, which is the TV," said James McQuivey, a principal analyst at Forrester Research. "So in that sense, it's a landmark. But it's a landmark only to dedicated iTunes users."

Apple will probably reach its goal of selling 1 million Apple TV units by the end-of-year holiday season, but the company's true challenge will be reaching out to consumers who are not iTunes users, he said. On top of that hurdle, Apple faces a determined competitor in Microsoft, whose XBox 360 gaming console costs about the same, has already sold 10 million units, and can also play movies as well as games.

"This is an evolutionary dead end. Apple will make some money on it, but version two could be the real game-changer. Will there be a tuner in it? Will it be a DVR? " McQuivey asked in reference to digital video recorders.

Apple is now shipping the Apple TV, which will work with a high (or enhanced)-definition widescreen TV and either a Mac running Mac OS X version 10.3.9 or later or a PC running Windows XP Home or Professional. The system also requires iTunes version 7.1 or later and an 802.11b/g/n wireless network using AirPort, AirPort Extreme, or 10/100 Base T Ethernet networking.

Copyright © 2007 IDG Communications, Inc.

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