Apple Finally Ships Apple TV Set-Top Boxes

Apple Inc. (AAPL) made its biggest move yet into the living room on Wednesday by starting shipments of the Apple TV box, a gizmo that lets people take music, photos and video stored on a computer and play them on a television screen.

The small silver box with a white Apple logo costs $299 and can store up to 50 hours of video, 9,000 songs, 25,000 photos or a combination thereof. It is available this week at Apple's online store, retail stores, and also from resellers.

Apple TV has garnered some positive early reviews, including one by Wall Street Journal technology columnist Walt Mossberg, who said the wireless box was easy to install and simple to use.

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A remote control lets user watch movies or TV shows bought from Apple's iTunes store, view photo slide shows, or listen to music.

One of the chief complaints is that the Apple TV does not — at least for now — record TV shows, which means it cannot replace digital video recorders like the TiVo.

Over the past year, TV networks and movie studios have increasingly made their shows available online. That spurred a flurry of gadgets and services that connect the PC to the TV — including those from Microsoft Corp. (MSFT), Sony Corp. (SNE) and TiVo Inc. (TIVO) — but none has emerged as a clear winner.

"It's Apple's first major foray into the living room," said Shannon Cross, an analyst at Cross Research. "I expect many more products to come that expand Apple's reach beyond this initial Apple TV."

Apple TV works with the iTunes digital jukebox that runs on either Macintosh or Windows computers, and with the integration of the two, gives users access to more than 400 movies, 350 TV shows in near-DVD quality, more than 4 million songs, 5,000 music videos and myriad podcasts and audio books.

The company hopes the burgeoning amount of content sold on iTunes, which has fueled sales of the Apple's leading iPod digital music player, can also spur sales of Apple TV, Macs and other Apple products, analysts said.

But some critics say the market for consumers interested in shifting media from the PC to TV is still small.


Apple co-founder and Chief Executive Steve Jobs debuted the Apple TV to a gathering of Macintosh software developers in September, saying at the time the growing mix of Apple products would put it squarely in homes, cars and consumers' pockets.

Waiting in the wings is Apple's much anticipated iPhone, a sleek device that integrates e-mail, a full Web browser, an iPod, instant messaging and phone services. Apple has said that device, starting at $499, will ship in June.

Apple TV synchronizes with one computer and content downloaded from iTunes is transferred to the 40-gigabyte hard drive in the device for direct playback on high-definition TVs. Users can link the box, about 8 inches square and an inch tall, to as many as five other computers.

While iTunes is by far the largest online store for digital content, Apple TV also offers a limited ability to stream other content from the Web, such as film trailers and song previews.

Analysts expect Apple to expand selectively the amount of content that users can stream straight from the Internet. Video-recording ability also is likely down the road.

"This is a new product in a new ecosystem for them," said Gartner analyst Mike McGuire of the Apple TV. "They don't want it to look like just another streaming experience."

However, McGuire, who plans to buy an Apple TV, noted that it was unlikely Apple would permit users to watch grainy homemade YouTube video clips on a high-definition TV.

"Why would I want to sully my new LCD TV with some mildly amusing video somebody shot with their camera phone?" he said.

With Apple TV, analysts said it's now a bit easier to fathom where the famously secretive company is going as content becomes ever more digitized and the PC and the TV merge.

"We now have some more visibility about where Apple is going with four 'spheres' — PCs, music, phones soon, and video next year," wrote Bear Stearns (BSC) analyst Andy Neff in a February note on Apple.