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Apple TV: The case for waiting

Apple TV will soon hit store shelves at a tempting $99 price point. But the product's full potential won't be revealed until a November software update.

Apple TV
Donald Bell/CNET

The first reviews of Apple TV are hitting the Web today, and there are, for the most part, no big surprises. (As for the CNET review: Apple has indicated that our review sample will be arriving on September 30; we'll have a full hands-on review with video soon after.)

As expected, the new Apple TV delivers largely the same experience as the previous model, with the addition of an all-streaming rental service and Netflix compatibility, all crammed into a much smaller design. But it's the $99 price tag that's the real attraction here: at that price, the device is likely to become an impulse buy in a way its $229 predecessor never was.

That's the idea, anyway. Unlike the weak competition the first Apple TV faced in 2007, the new one will be entering a far more mature market for Internet TV, with everything from game consoles to Blu-ray players to TiVo DVRs offering the same sort of video-on-demand functionality. Add to that the forthcoming Logitech and Sony products offering Google TV, and the long-awaited Boxee Box product. Already going head-to-head with the Apple TV, meanwhile, is a refreshed line of Roku boxes, with models available at an even cheaper $59 and $79.

Roku got a big boost earlier today with the news that the Hulu Plus subscription service will soon be available on all of the company's existing and forthcoming models. On the surface, that strengthens Roku's pitch as an Apple TV alternative with far more choices. Roku lacks iTunes, of course, but it matches Apple TV's Netflix and Flickr support, plus adds Hulu, Amazon, Pandora, and MLB.TV--in addition to dozens of other, more niche-y "channels" available on its ever-growing roster.

Roku XDS
Roku: Up to $40 cheaper than Apple TV, and with Hulu Plus. Sarah Tew/CNET

Hulu Plus promises to deliver all current-season episodes of most ABC, Fox, and NBC shows (and quite a bit of legacy content) for a flat $9.99 monthly fee. That means--assuming you're interested in shows from those networks--that the Roku could save you a bundle versus Apple TV, where your best-case scenario (aside from Netflix) is to buy shows a la carte. Assuming a price of 99 cents, that's just 10 episodes on iTunes (say, two to three a week) versus an unlimited number on Hulu during the same month.

Meanwhile, for shows not available on Hulu Plus, Roku users could rent or buy them on Amazon's service, which has matched Apple's 99-cent pricing on ABC and Fox shows. (We're leaving out a discussion of the Roku versus Apple hardware costs, and Netflix subscription is identical--if not less, if you opt for one of the cheaper Roku boxes. That's at least a wash between these two options.)

So, game, set, match Roku, right? Maybe, maybe not.

Apple starts with a huge brand advantage that the far more obscure Roku just doesn't have. But that's only the beginning of the story. The big wild card in the Apple TV equation is the forthcoming iOS 4.2 update--currently slated for November--that's scheduled to add AirPlay compatibility to iOS devices (iPads, iPhones, and iPod Touch models). As demonstrated during Steve Jobs' September 1 press conference--and highlighted on Apple's Web site--AirPlay is an evolution of the existing Apple Remote app that lets iOS devices control the Apple TV. But instead of just duplicating the features of a dedicated remote, AirPlay lets users stream media from their iPad or iPhone to the Apple TV.

In other words, AirPlay could well be the killer app for the Apple TV. But the problem is that we still don't know the details, and they could make or break a feature like AirPlay. Is it a content-agnostic "screen scraper" that works with all iOS-based media, or is it only compatible with iTunes content? Does it stream the content directly from the iPad/iPhone, or does it merely "hand off" the viewing of a cloud-based source from the handheld product to the Apple TV? Will third-party app providers need to update their apps to be AirPlay compatible--and will the primo content providers like Hulu Plus, ABC, and Pandora be onboard with adding that functionality?

That's a lot of question marks, to be sure. But if Apple sticks to its November time frame for the 4.2 update, we should have the answers in just a few weeks.

And those weeks will be eventful indeed. During the same time, we'll be seeing the Google TV products from Logitech and Sony (neither of which currently have final pricing or availability details) as well as the $200 Boxee Box.

In other words, the Internet TV space is more fluid than ever, with new services, options, and products sometimes only a firmware update away. Even at these tempting prices, we suggest sitting back and waiting a month or two, until we get a more informed picture of how this Internet TV battle royale is shaping up.

That said: Have you already made up your mind? Are you buying an Apple TV or a Roku? Or are you holding out to see what Google TV and Boxee have to offer? Share your thoughts below.