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Apple's iTV Intriguing but Not a Core Business

But expectations that computers and entertainment centers would converge in some fashion date back nearly 30 years. Though the technology certainly is closer to making the digital living room a reality today, the market still hasn't really taken off.

More specifically, iTV's success could be important for Apple. The company's growth in recent years has been driven largely by its lineup of iPod digital music players. But with the digital music market maturing out of the hypergrowth phase, investors have been on the lookout for the company's next growth area.

iTV -- and Apple's new movie download service that will link to it -- is one of the first moves by the company to broaden beyond the digital music and computer markets into a new market.

There are good reasons to believe that couch spuds could welcome Apple into their living rooms. Not least among them is Apple's success in digital music and related markets: The company simply dominates the digital music market, holding more than a 75% share of U.S. sales of portable digital players and nearly 90% of sales of digital music downloads.

Moreover, Apple has done far better at selling TV shows than many investors imagined when the company added them to its iTunes Music Store last year. At last count, Apple had sold roughly 45 million shows and now has the support of all the major networks.

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