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Apple TV 3 Fails to Excite Wall Street

Updated with Apple TV's Netflix feature and stock prices.

NEW YORK, ( TheStreet) - Apple (AAPL) unveiled a smaller iPod lineup, a social network for music lovers called Ping and offered its third try at Apple TV during its product showcase event in San Francisco Wednesday.
Apple TV

Apple didn't mention it had fixed the iPhone's antenna problem, it dropped the old iPod classic, killed the original iTunes logo and squashed any near-term hope that it was ready to radically remake television viewing.

The stock, after hitting a high for the day of $251.46 just before the event, lost ground as it became clear that Apple chief Steve Jobs wasn't going to spring any huge surprises on the crowd.

For investors, the biggest takeaway is that Apple TV is not being embraced by Hollywood and all the major media outlets. This effectively limits the chances that Apple will rise as the model of a new video sales and distribution system. The iTV solution is still a ways off.

In a sign of progress, Disney (DIS) and News Corp.'s (NWS) Fox unit signed on for Apple's $1-a-show TV rental service. Apple will also offer $5 streaming movie rentals along with Netflix (NFLX) access for subscribers. Netflix shares closed up 7% at $134.91 Wednesday.

The Apple TV, which is small enough to fit in your palm, will sell for $99, replacing the previous $300 version.

The newly logoed iTunes got a few new features, including Ping, a Twitter- or Facebook-styled social networking system that lets you follow your friend's music choices and comments. The move, while huge, was far from the cloud-based music streaming service LaLa that Apple acquired and killed earlier this year.

The shrunken new iPod lineup features two clip-on music players, the new shuffle and nano touch. And the new iPod Touch was outfitted with two cameras, one front-facing for Apple's FaceTime video chats. Apple plans to sell the 8-gigabyte iPod Touch for $230, $300 for the 32-gigabyte and $400 for the 64-gigabyte model.

Apple shares closed up 3% at $250.33 Wednesday and were up another 39 cents in premarket trading Thursday.

-- Written by Scott Moritz in New York.

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