Interesting interview for the Wall Street Journal here (note this link may expire):

http://online.wsj.com/article/SB118193102977936957.html?mod=yahoo_hs&ru=yahoo

Jobs said that Apple is in two businesses today (computers and music), is adding a third one (phones), and they have one "hobby."

The hobby is Apple TV. I call it a hobby because a lot of people have tried and failed to make that a business -- everybody from TiVo to Microsoft. It's a hard problem. It's a business that's hundreds of thousands of units a year, but it hasn't really crested to be millions of units per year. If we work on it and improve things over the next year, 18 months, we can crack that.

The Apple TV certainly has potential.

Consumers are just now warming up to the idea of the internet as another source of TV entertainment.

I think Apple has the right idea. It's a "hobby" for now until the market catches up and then it becomes more of a profession.

Think about the Apple TV. It's really overengineered. It runs OS X has a GPU and Intel processor. That to me means future growth is planned.

There are limitations that may be hardware based. You have a 5mpbs ceiling for 720p content. This needs to double and likely future chip revisions it will.

The tantalizing thing is Leopard. Where Tiger makes networking/sharing possible it doesn't exactly make it easy. Leopard makes it foolproof to network Macs and PC with no configuration (Bonjour) ...search these networked configurations (Spotlight) and automagically playback the files you request.

I see very little problem with having multiple ATV attached to TVs throughout the home with different content residing on each unit but said content is available everywhere.

Apple is going to be patient here. The ATV in 18 months is going to be far more capable than the units today and that's based primarily on software.