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Apple TV Projected To Surpass TiVo And Netflix

Mixing Apple TV with iTunes could become a disruptive technology to legacy video purchase-and-consumption behavior, according to ThinkEquity Partners.

It may not quite have the cachet of the iPhone, but Apple TV has the potential to alter the media landscape and substantially improve Apple's value as a company, or so says one financial analyst.

Apple's forthcoming wireless set-top box, expected any day now, is designed to bring video acquired from the iTunes Store into the living room and put it on TV.

ThinkEquity Partners financial analyst Jonathan Hoopes foresees some 25% to 70% of the 22 million Mac users, and many more PC users, buying the device in the next five years, enough to eclipse both set-top box maker TiVo (4.4 million subscribers) and DVD mail service Netflix (8.8 million subscribers).

"As a digital media content delivery vehicle positioned in users' living rooms, we think the AppleTV/iTunes combination could become as disruptive to legacy video purchase-and-consumption behavior as the iPod/iTunes combination has been to the traditional music business model," Hoopes said in a report issued Monday.

Hoopes projects Apple TV could add more than $10 billion to Apple's market capitalization in the next few years.

Citing the simplicity of design evident in Apple TV, its remote, and its Front Row software, Hoopes said ease of use would be "a major driver for rapid adoption among users who are tired of having to master ever-more-complicated configuration menus and user interfaces that are common in today's consumer electronics."

Hoopes also speculates that Apple TV could become a viable gaming platform, though he concedes that "the gaming market is extremely competitive with major players such as Sony, Nintendo and Microsoft slugging it out in a big way."

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