Apple Slashes Apple TV Price to $229, Eliminates 40GB Model

Apple quietly cuts the 40GB model of its Apple TV and reduces the price of the 160GB model to $229, following recent price cuts in the company's other devices. Apple has made news in September on two fronts: introducing a revamped iTunes store and an iPod Nano with a built-in camera, and CEO Steve Jobs appearing at a public event for the first time since his lifesaving liver transplant earlier in 2009.

Apple has slashed the price of its 160GB Apple TV to $229, a fairly substantial reduction from the original $329, while eliminating the original 40GB model entirely from its product lineup. The adjustment was performed quietly, with visitors to the Apple Website on Sept. 14 noting that the Apple TV offerings had been pared down to the larger, newer 160GB model.

Despite relatively robust sales for the Apple TV, which allows users to port content from the iTunes store directly onto their televisions, the 2-year-old device has not generated the same amount of industry or consumer buzz as the iPod or the iPhone.

During a 2008 earnings call, Apple CEO Steve Jobs referred to products attempting to merge the Web with television as being not quite ready for prime time: "I don't think anybody has really succeeded at it, and actually the experimentation has slowed down," he said. "A lot of the early companies that were trying things have faded away, so I'd have to say that given the economic conditions, given the venture capital outlooks and stuff, I continue to believe it will be a hobby in 2009."

While that statement may have seemed like a dismissal of Apple TV's marketplace prospects, Apple has nonetheless continued to update the device's software. In June, the device gained remote app directional control, Flickr Search and updated view modes.

The reduction in the Apple TV's price and number of models fits into Apple's larger trend of winnowing down its offerings. Several price reductions were announced at Apple's Sept. 9 event at San Francisco's Yerba Buena Center for the Arts, with the cost of the iPod Touch line dropping to $199 for the 8GB model, $299 for the 32GB model and $399 for the 64GB model.

During the presentation, Steve Jobs introduced a revamped iTunes 9 and a new iPod Nano with a built-in camera, 2.2-inch color screen and FM radio. Looking very thin, Jobs encouraged the audience to become organ donors, citing his own liver transplant earlier in 2009.

For pictures from the Apple event with Steve Jobs, click here.

The Apple event was also notable for what was missing. Rampant rumors had suggested that Apple would use the spotlight to issue the Beatles song catalog on iTunes, confirm the existence of an Apple tablet PC, roll out an iPod Touch with a built-in camera or announce the death of the traditional iPod. None of these came to pass.

In the face of strong economic headwinds that have driven down sales of most PCs and devices, Apple's own sales and revenue have stayed fairly strong during the recession. During its July 21 earnings call, Apple announced that quarterly profits had risen 12 percent year over year to $1.23 billion, or $1.35 a share, beating Wall Street estimates. About 5.2 million iPhones and 2.6 million Macs were sold during the quarter, while sales of iPods declined 7 percent year over year to 10.2 million units sold.

The strong quarter seemed to negate analysts' fears that Steve Jobs' medical leave for much of 2009 would negatively impact Apple's sales and product pipeline.

Editor's Note: The price in the article title has been corrected to $229.