Apple TV Gets a Major Upgrade (Update 1)

Updated from 10:32 A.M. to include news on Apple being awarded iPad contract.

NEW YORK ( TheStreet) -- In an effort to continue focusing on software and services and generate good publicity, Apple ( AAPL) announced that HBO Go and WatchESPN are coming to the Apple TV.

HBO Go, a division of Time Warner ( TWX), offers users every episode of every television show HBO has produced and plenty more movie choices, making it an alternative to HBO on Demand.

HBO Go, which requires an HBO subscription, has become one of Apple's most popular apps on the App Store, the company noted, and this is only furthering to build out that platform. "HBO GO and WatchESPN are some of the most popular iOS apps and are sure to be huge hits on Apple TV," said Eddy Cue, Apple's senior vice president of Internet Software and Services in the press release. "We continue to offer Apple TV users great new programming options, combined with access to all of the incredible content they can purchase from the iTunes Store."

ESPN, the popular sports cable network from Walt Disney ( DIS), also plugs a huge hole for Apple, which now will allow ESPN subscribers to watch ESPN content on their Apple TV devices. It'll allow users to watch the ESPN family of networks, including ESPN, ESPN2, ESPNU, ESPN3 and ESPN Buzzer Beater/Goal Line.

In addition to HBO GO and WatchESPN, Apple also signed deals with three new content providers, Sky News, Crunchyroll and Qello to offer live news, sports and current TV programming.

Adding both HBO Go and WatchESPN demonstrates that Apple is serious about focusing on services, and not just providing lip-service to investors and customers alike. There are over 60,000 movies and 230,000 TV episodes available on Apple TV, but HBO Go and WatchESPN are perhaps the two most marquee streaming services, aside from Netflix ( NFLX) and Hulu.

It's becoming clear that Apple is focusing more on delivering content to users, with Apple TV and iTunes becoming an increasingly important part of the company's business. The company noted more than 1 billion TV episodes and 380 million movies have been downloaded from iTunes. Over 800,000 TV episodes and over 350,000 movies are being bought per day. That's huge money for Apple, and is part of the reason iTunes has been talked about previously as Apple's next big product as the company transitions itself into a software company.

In another perhaps surprising move, Apple announced it had won a contract worth $30 million to provide the Los Angeles School Board of Education's with iPads for its students, starting in the fall. The iPads will come pre-loaded with educational apps, as well as Pearson Common Core System of Courses.

Shares of Apple were lower in Wednesday trading, off 1.1% to $427.25.

-- Written by Chris Ciaccia in New York

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