I got an Apple TV for Christmas, so I'm super excited about the upcoming software update that was announced today. However, while I agree that no company has yet to achieve a super-successful set-top box, I don't think that Apple TV 2.0 is going to be the success that Apple is looking for.
The Apple TV 2.0 UI in action
For me, the problems with Apple TV are that it's a bitch to get non-iTunes content onto the thing, and that the breath of available video content on iTunes doesn't cover everything that I want to watch. And what Apple announced today - being able to purchase content directly from Apple TV, isn't going to solve these problems.
One of the key drivers of the iPod's success was that it was butt simple to take all of the content that you already owned (music on CDs) and get it onto your iPod. The problem with Apple TV (and all other entrants into this market) is that it isn't easy to take your DVDs and rip them on to your set-top device. Even more damning, even if all of the DVDs that I owned were on iTunes - there is now way that I would re-buy all of that content - it would be a huge waste of money.
So Apple, like the rest of the consumer electronics industry, is going to continue to be stuck in the TV quagmire. They can continue to push the major studios to release more and more of their content on iTunes, which over time, will help. But for me, and everybody else who owns a bunch of DVDs (hint: nearly everyone that Apple would want to sell Apple TV to), having to lose that entire stockpile of discs just isn't very compelling. And while from a technological perspective, Apple could easily add DVD ripping and encoding to iTunes, they won't because it will piss off the very same studios that they are trying to court.
And so, the entire industry is stuck, and once again, the lowly consumer is screwed.
-Andy.