New Apple TV - Nearly $200 Cheaper than Before

Apple (AAPL) failed to make a case Wednesday that Apple TV could replace cable TV. Instead, it did something smarter: It introduced an Apple TV that consumers will want alongside their cable boxes.

Which, for the first time, is a winning strategy to get Apple on the big family room screen. Apple CEO Steve Jobs unveiled the new Apple TV at the company’s press conference Wednesday, along with a new iPod Touch and a music-centered social network called Ping.

But the star of the show was Apple TV – a product that has so far been a glaring failure for a company that does so much right. Jobs even introduced the segment by saying Apple TV has been a “hobby” for Apple, and that the company has learned a lot about what consumers want.

So the new Apple TV costs $99 – nearly $200 less than the old Apple TV – and the box is the size of two iPhones side-by-side, about one-fourth the size of the previous version. In one shot, that makes Apple TV a no-brainer purchase for many consumers. The price is about the same as dinner for two and wine at a P.F. Chang’s, and the box won’t have to find a chunk of space amid all the DVRs, DVD players and video game consoles piled by the TV.