The first blow in 2010’s media streamer wars lands in the shape of the all new Apple TV. Since the first version of the product was released in 2007, Apple TV has failed to switch the world on to the idea of media streaming, as we’ve seen the iPad do for tablets. Why? The hardware looked great, but for once Apple got the recipe wrong. The first generation was simply too expensive, required connection to a PC or Mac, and importantly, only worked with content streamed or purchased from iTunes. Importantly, consumers were uneducated about the benefits of digital media receivers and with a lack of compelling content available at that time, the first generation Apple TV remained in the realm of fanboys, hackers and digital media enthusiasts. Only once the product was hacked (courtesy of applications like ATVFlash & Patchstick), and access opened up to applications, third-party online services and streaming from network computers,  did Apple TV really begin to earn its crust in the digital home.

Fast forward to 2010, and at the launch of the company’s second generation Apple TV, a surprisingly humble Steve Jobs revealed that the company had learned a few lessons from their oft-quoted “hobby”.

Apple TV was designed to be an accessory for iTunes and your computer. It was not what people wanted. We learned what people wanted was movies, movies, movies. What have we learned from our users? They want Hollywood movies and TV shows whenever they want. It’s not complicated. They don’t want amateur hour. They want HD – everyone wants HD. They want to pay lower prices for content. They don’t want a computer on their TV – they have computers. They go to their TVs for entertainment. They don’t want to manage storage. They just want to watch movies and TV shows. And they don’t want to sync to a computer. And they want whatever hardware we have to be silent, cool and small.

That statement encapsulates the essence of the Apple TV refresh. It’s very small. Smaller than you think it is. That means the local storage has gone. It’s cool (you could fry an egg on the v1 Apple TV once it got going), silent, easy to connect to your TV and allows you to browse, purchase and play content from iTunes. That’s a broad view of the Apple TV proposition, which in essence hasn’t changed too much since the product was originally demoed in 2006. The new generation offers certain refinements, but this time around there are a number of fundamental differences which change the game.

Firstly, iTunes now has huge dominance globally in the digital marketplace. Millions of users organise, enjoy and purchase their music and video through the platform. Whilst I personally find iTunes completely horrible to use, and long for the day when someone in Cupertino takes the thing out the back and shoots it in the head, it’s entirely necessary (in the non-jailbreak world) to sync content with your iPod or iPhone, and yes, in the past Apple TV. Secondly, the library of audio and video content now available on iTunes is colossal, and as well as an admirable selection of HD Movies, Apple are rapidly building their selection of streaming TV titles. Thirdly, consumers are slowly coming around to the idea of the Connected TV, and as more content becomes available, from whoever provides it, the idea that we get entertainment on TV over the Internet, rather than the antenna, satellite dish or cable box is not so strange now. Fourthly, at $99, Apple TV is an impulse buy. Combine great looking hardware with the Apple brand and what looks like pretty cool content and heck, who cares if it works, it’ll make a great gift.

So the time is right for Cupertino to take a fresh look at Apple TV, but on the flipside, they’re not alone in trying to crack the Connected TV market. With Google, Sony and Logitech working together on Google TV powered televisions and standalone set top boxes, as well as D-Link and Boxee bringing their own digital media receiver to market in November, the competition will be fierce. Don’t forget Microsoft, who have built out their own digital media hardware and content platforms – for some users the combination of Zune Marketplace, Xbox 360, Windows PC and Windows Phone 7 will make for the perfect storm. But the difference between Apple TV and all of those players is that Apple TV is here, on shelf and available to buy, so let’s take a look at what the new Apple TV has to offer.

What’s in the Box?

It may sound foolish, but one Apple TV’s most endearing and indeed competitive features is its size. Whilst Logitech and Boxee will be shipping beautiful (and in Boxee’s case, quirky) pieces of industrial design later in the year, we were all taken aback by just how small the new Apple TV is, and your first hint of that is the wrist watch-sized box it ships in.

P1000796P1000797P1000798P1000809

Inside, you’ll find:

  • Apple TV
  • Power Cable
  • Remote Control
  • Setup Guide

There’s no room for Ethernet Cables, HDMI cables or any other supporting accessories, and at $99, you can just about forgive the lack of generosity in not supplying cables to connect Apple TV to your TV. There’s no huge investment in complex packaging either. An outer sleeve slips off the main package, and you’re in, with the Apple TV stacked on top of the remote, which itself is stacked above the accompanying figure-of-eight-style power cable (hey, at least they threw a power cable in).

P1000804P1000807P1000810

At just 23mm (height) x 98mm (width) x 98mm (depth) Apple TV is the smallest digital media receiver we’ve reviewed. Remarkably for such a small device, there’s no external power brick, and that means it should fit very easily into your TV cabinet unless it’s already bulging. Whilst the Boxee Box boasts a highly original design, it’s an awkward shape to fit under the TV. No such concerns with Apple TV, whose hockey-puck footprint is small, flat and unobtrusive. There’s not a huge amount else to say about the chassis, other than you’ll find power connectors, HDMI connector, optical audio and 10/100 Ethernet socket at the rear. A micro USB port is also available which is used to restore the Apple TV’s default software, and is likely to interest the jailbreak community especially.

Under the hood, the Apple TV is powered by the same Apple A4 chip that supports the iPad plus 256MB RAM, with the device’s operating system stored on an 8GB Flash chip. As mentioned earlier, there is no accessible storage on the device for content.  The 10/100 Ethernet may not be the fastest network connection available, but is fine for streaming music, videos and photos across the network as well as from online services. For those without a network point nearby, 802.11 a/b/g/n Wi-Fi is also neatly integrated into the device, with no antennas on show. We’ll see if holding the device left handed causes the network connection to drop. No, we’re good.