Apple TV Sales Are on the Fritz

In a year of blockbusters, it's safe to say Apple had a dud in its Apple TV. The $300 box couldn't simplify enough the moving of digital images and music around the home, says JupiterResearch's Michael Gartenberg. "It's definitely best of breed," he says. "But home networking remains a challenge."

Consumers also don't get the point, and that's understandable, as the point gets muddled. Many fans say Apple TV is best for transferring photos and music from the pc to the TV. Apple CEO Steve Jobs emphasizes the link between the TV and Internet entertainment. Even then, Apple's iTunes failed to lasso TV and movie studios as it did the music business.

"The market for Apple TV today is not yet fully developed," concedes an Apple spokeswoman. But she says the company remains committed and excited about the long-term potential. Jobs describes it as the fourth leg to a chair so far built on the Mac, iPod, and iPhone. It's just wobbling a bit on that last corner.