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Apple's iTV Intriguing but Not a Core Business

It's not a stretch to believe that consumers who now have much of their music and TV shows on their computers and iPods might be interested in playing that content on their home entertainment systems.

"The value proposition is easy to explain," says Van Baker, an analyst with Gartner. Consumers' best audio and video equipment is typically in their living rooms, he says. "Who wouldn't want to watch their movies or listen to their music [there]?"

Gartner's Baker, among other analysts, blame today's small market for digital living room devices on the complexity of the products. They weren't easy to use, they were often difficult to configure and set up -- and they weren't compatible with the files consumers have purchased from iTunes.

In contrast, analysts attribute a good deal of Apple's success in digital music to the iPod's ease of use and to how seamlessly it works with iTunes. Ostensibly, iTV would offer similar simplicity in the digital living room.

"This market is crying out for an Apple solution," says Van Baker.

That may be, but the company and iTV still face some significant challenges.

As much as analysts believe that the digital living room is the wave of the future, the market is still unproven; products haven't sold well. And it's unclear if consumers are clamoring for a box that will link their computers to their entertainment centers.
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