Apple announced two things in San Francisco this month and only one of them is going to matter, which is a shame, because the small silver box is the more revealing product.
Apple TV is a hard drive with an HDMI socket that plays what is already in your iTunes library and buys more of it. Three hundred dollars, forty gigabytes, and no tuner, no disc drive, no subscription. You sync from a computer or you stream from one, and what appears on the television is the content Apple already sells you.
The strategic logic is easy to follow. Apple has seventy million iPod owners with libraries they have paid for, and those libraries are currently trapped on devices with small screens. Putting them on the largest screen in the house extends the existing business without requiring anybody to buy anything new from anybody else. It is the same move that worked with music, applied to the living room.
The reason I do not think it works is bandwidth and catalogue, in that order. Standard definition downloads over a domestic connection in 2007 take long enough that the impulse dies before the film starts. The store’s film selection is thin, because the studios watched what happened to the music industry and have no intention of handing over the same leverage twice. And the picture, when it arrives, is not high definition, which is an awkward thing to sell to somebody who has just spent a great deal of money on a panel to watch high definition material they cannot currently find.
Set against that, the thing under the television that plays films in the best available quality is a games console with a disc drive, and both of those are cheaper than this box.
What I find genuinely interesting is the shape of the bet rather than the product. Apple has looked at the living room, decided the winning position is the one that owns the content relationship, and built the cheapest possible appliance to hold that position while the network catches up. The hardware is deliberately unambitious. It is a bookmark.
The phone announced on the same stage is the opposite: enormously ambitious hardware in a category Apple has never entered, with a fixed date and a carrier deal nobody thought was available. Everyone in that room understood the ranking immediately, which is why this box has been discussed for about a day.
My guess is that Apple TV sells modestly to people who already own a great deal of Apple hardware, gets updated quietly for a few years, and is eventually remembered as the placeholder Apple kept in the living room until broadband made the actual product possible. That is not a failure. It is just not a product anybody needs this year.