Apple TV + iPod Touch = Revolution?

Apple has quietly dropped the price of the 160GB model of its Apple TV device while eliminating the 40GB version of its not-so-popular home media player.

The high end model now costs only $229 although UK customers still have to fork a jaw dropping £263 while the 40GB model is still on sale for £195.

Not only is the Apple TV 160GB the sole survivor of the family but it is now integrated in the iPod range (to be fair, it has always been there). The device which was launched back in March 2007 was never as successful as Apple's other range of products.

Apple did release a number of software updates for the Apple TV for free (which unlike other updates for the iPod Touch or the Mac range). There are a number of reasons why Apple TV failed. The fact that it is competing with a different breed of competitors, the fact that it is tied to Apple's iTunes and the fact that content is often free in this segment.

Back in April, we suggested that Apple could replace the Apple TV with a wireless HDMI base unit and flog it for £99 (or £199). This could radically change the way the iPhone or the iPod Touch is perceived.

The next generation iPhone (or iPod Touch) could wireless connect (and recharge) to that base unit which would be devoid of storage capacity (except for a small buffer) and processing power, both of which would be derived from the iPhone/iPod Touch. Expect the latter to come with at least 128GB worth of storage and a dual core processor.

Our Comments

Piper Jaffray analyst Gene Munster (who is often regarded as Apple's Oracle), said that "Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 or $40 per month). Such a product would effectively replace a consumer's monthly cable bill (around $85/month) and offer access to current and older episodes of select shows on select channels."

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