Apple TV: Sequel (or Is It a Rerun?) Gets a Shrug on Wall Street

(MoneyWatch)  If at first you don't succeed, make a few upgrades. Apple elicited little reaction on Wall Street Wednesday to the introduction of a new version of Apple TV, a device used for streaming video on television sets via the Internet. Apple's stock (AAPL) rose about 3 percent on the day, but so did the whole market.

Apple has not gotten a lot wrong in recent years. Apple TV is an exception. It has been a dud since first hitting the marketplace in 2007. Steve Jobs, Apple's chief executive and not a person to dwell publicly on his shortcomings, conceded as much, telling a crowd in San Francisco that "it's never been a huge hit."

Jobs also introduced a new version of the iPod portable music and video player Wednesday, an Apple device that definitely has been a huge hit over the years. The new iPod has some social networking capabilities, and the nano version can be operated with a touch screen.

The new model of Apple TV, which the company plans to start selling within a month, is smaller and cheaper than the old one - it costs $99 - and it's supposed to be simpler to operate. Keeping up with the times, it plays movies in high definition, and Netflix members can stream titles from their wish lists. Traders embraced this part of the announcement, sending Netflix stock (NFLX) up 7.5 percent Wednesday.

One issue that Apple appears not to have addressed is the absence of Tivoability. Apple TV has no digital video recorder feature.

That's not the only ephemeral aspect to Apple TV. Apple is trying a controversial model for content in which it rents out videos cheap - 99 cents for TV shows - but doesn't let customers own them.

Content providers have mixed feelings about the model. Two of the four major American television broadcasters, Disney (DIS) and Fox (NWS), are going along with it; the others, NBC Universal and CBS (CBS), which also owns this website, have yet to consent.

Such uncertainties and the inauspicious first go-around for Apple TV may account for the shrug in the stock market. The fact that even the Apple TV/iPod two-for-one special failed to get much of a rise out of investors suggests another possibility: that Apple and its stock are suffering from whiz-bang fatigue. Apple has trotted out so many brilliant products and kept expectations locked at such a high level for so long that the returns are beginning to diminish with each new (or refurbished) gizmo that it unveils.

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