Apple TV Still A Dud After Price Cut

Lower pricing hasn't made the Apple TV set-top box a smash hit.

Last month, Apple gave its digital living room gadget more bang for the buck, knocking $100 off its 160 GB Apple TV, to $229, and killing off its smaller version.

That has not made it a must-have gadget.

Apple TV Still A Dud After Price CutAt Amazon, it's ranked the no. 474 best-selling electronics device. (That's marginally better than being no. 711, its rank on Aug, 20. But it's still very low, and below several less-impressive devices.)

And Google Trends shows that search activity for "Apple TV" in the United States hit a small bump after the price cut, but has since settled to where it was before. (See chart below.)

To be sure, these metrics are obviously not the whole picture. Apple retail store sales are an important factor that we don't have visibility into. Amazon ranks and Google searches have a lot of variables that we also don't have visibility into.

But we think these two metrics are valid enough to support the argument that it has not become a huge hit thanks to its better value.

We think that there's a market for a digital gadget that helps consumers watch Web video on their living room TVs. But so far, no one's perfected it.

As we said last month:

Apple needs to make major changes to the Apple TV's software and platform. That could include some or all of these options:

* Opening Apple TV up to all Web video content, whether Apple controls it or not. (Rival Roku is heading in this direction with its $99 box.)
* Making iTunes a better video service; perhaps offering more subscription options than simply whole seasons of individual shows.
* Adding a Blu-ray player to Apple TV so it could replace an existing port on peoples' TVs, not take up a new one.
* Establishing an App Store for Apple TV, so that companies could offer video services, games, other apps, hardware accessories, etc., the way they do on the iPhone.

These ideas aren't new — we've discussed many in detail here and here.

But Apple hasn't made any substantive changes to the platform in more than a year and a half. Eventually, it will have to do something. Even at $229, the Apple TV remains an expensive device with a very limited feature set. That's why it's been unpopular with consumers and why Apple has to excuse it as a "hobby" on earnings calls.

Here's that Google Trends chart:

Apple TV Still A Dud After Price Cut