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Monday, September 14, 2009, 04:45 am PT (07:45 am ET)

Apple discounts 160GB Apple TV to $229, nixes 40GB

Apple this weekend discontinued the 40GB Apple TV and discounted the higher capacity model of its living room media player to $229.

The price drop places the 160GB offering at the cost previously represented by the now-defunct 40GB Apple TV. Currently, the 160GB model is the only version of the hardware available.

Weeks ago, Piper Jaffray analyst Gene Munster noted that the 40GB Apple TV had a wait time for those looking to purchase, something that had never been seen before. That lead Munster to believe that Apple could discontinue the model and drop the price of the 160GB hardware — a prediction that proved to be correct.

Munster also believes that a major upgrade to the Apple TV is planned at some point in the future, and that hardware would be based around a new iTunes subscription service. However, he does not expect the new hardware to appear soon, because negotiations with the content providers must take place first — likely a process that will take some time.

The analyst has said he believes a new Apple TV would increase video purchases if a subscription model were to be offered. He believes the popularity of Hulu and Netflix Instant Watch are evidence of this.

Apple TV


"Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 or $40 per month)," Munster said. "Such a product would effectively replace a consumer's monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels."

In addition to subscriptions, Munster has predicted that a new Apple TV would also potentially include DVR capabilities. The analyst also believes that in the long-term vision for Apple is a full-fledged Apple television set with built-in media syncing capabilities. He expects such a device to appear in the next two to five years.