Apple today introduced a dramatically smaller and less expensive Apple TV that streams rented movies and TV programs to high-definition television sets, making good on rumors that the company would push what CEO Steve Jobs has long called a "hobby" part of the business.
Jobs also laid out a completely revamped iPod music player lineup, talked up a pair of upgrades to its iOS mobile operating system and touted changes to the company's iTunes music software and store that add some social-networking-like features.
The new Apple TV will sell for $99, a major drop from the original model's $229; occupy a footprint one-fourth as large; and lack any storage or synchronization capabilities, said Jobs. The new device, which will hit retail in about four weeks -- customers can pre-order it starting today -- can connect to a wireless network or through Ethernet to draw content from the cloud.
"This is quite a bit different from what other companies think," said Jobs, referring to rivals ranging from television manufacturers to Google, all of which want a piece of the new living room. "There are no more purchases."
Apple will drop content purchasing for an all-rental model that streams content to the hardware, which also let the company dump the older model's hard drive. "People won't want to manage storage," said Jobs. "And they don't want to sync to their computer. ... It's too complicated."
Instead, users will be able to rent first-run high-definition movies for $4.99 and some television programs from the ABC and Fox networks for 99 cents.
Jobs hinted that Apple's discussions with other networks had failed to produce deals. "Not all of them wanted to take the step [into rentals] with us," he said. "[But] we think the rest will see the light."
Consumers who subscribe to Netflix will also be able to stream the all-you-can-watch movies and television programming the DVD delivery service offers to the new Apple TV.
But analysts today called the revamped Apple TV everything from "lame" to "still a hobby."
"I thought it was fairly lame until they got to two things," said Ezra Gottheil, an analyst at Technology Business Research. "First, the $99 price point, and second, the fact that you can push content from an iPad to your TV."
The latter will rely on AirPlay, a new name for Apple's Wi-Fi-based AirTunes streaming technology. Slated for debut in November when Apple releases iOS 4.2 for the iPhone, iPad and iPod Touch, AirPlay will let those devices' users stream content -- such as pages from an iPad's browser -- to the Apple TV, and thus to the TV screen.
Ross Rubin, an analyst at NPD Group, also highlighted the Apple TV's sub-$100 price but said the new device doesn't make Apple an automatic winner in the battle for the living room. "It's still a hobby," he said, using Jobs' own past description for Apple TV.
Today, Jobs again acknowledged that Apple TV had "never been a huge hit."
"I think it will remain that way for the foreseeable future," said Rubin. "Apple's looking to lower the barriers [to integrating the technology with TVs], but this doesn't mean a massive rewriting of the game."
Earlier in his hour-plus time on stage, Jobs stepped through a refresh of Apple's iconic iPod digital music players. "This is the biggest change in the iPod lineup ever," he said.