I have been waiting, and waiting, literally for years for Apple to upgrade the Apple TV. I was expecting a version with a 500 GB hard drive or USB port turned on for an external hard drive (with out cracking the OS). When they finally "upgrade" they lower the resolution (the old one will do 1080i) remove the component video and analogue audio connectors, and worst of all, remove the hard drive. The whole idea of the Apple TV was to have access to your music, pictures, and video WITHOUT having to turn your computer on. I feel Apple has missed the boat on this one. They are trying to market this thing as a source for movies and TV but it just can't compete with OnDemand from cable. Where the Apple TV excells is as a MUSIC PLAYER for your entertainment center. I have been waiting for a larger hard drive that would fit my entire music collection so I can play it on my entertainment center. If they marketed this as an iPOD for your entertainment center than people would buy it. It needs to provide higher audio quality than a regular iPOD, it needs to have high quality audio decoders. It already outputs via it's digital audio output. People like me would use this for uncompressed audio in higher end systems. (And BTW, I have an airport express and the sound quality sucks.)
This is why as soon as they released the "upgraded" Apple TV I ran out and bought the older first generation version instead. (Did you know that they dropped the price of the 160 GB first generation Apple TV to only $150? That's $50 more for a 160 gb hard drive, 1080i output, component video and analog audio outputs--while they last!)
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