AppleTV Is Not Ready For Prime Time. Yet.

New product success is all about numbers. AppleTV doesn’t have enough features and not enough numbers to be a major hit. Yet.

Remember the iPod? It wasn’t an overnight success either, but everyone wanted one. So it will be with AppleTV. But not this year. Maybe not next year—just like the iPod.

I like to think of myself as a patient, thoughtful, reasonable, and pragmatic person. I bought an iPod from the Apple Store, sight unseen. $400 for 5 gigabytes of music space.

That same $400 will get you an AppleTV with a 160 gigabyte hard drive, but still it’s not a Ready For Prime Time device. Just as the original iPod wasn’t ready for Windows customers, AppleTV will get there.

Apple head Steve Jobs likes to use the phrase, “We skate to where the puck will be” when describing Apple’s product efforts. AppleTV is a thinly veiled Trojan horse that’s short on features and value. This year. Next year, the puck will be elsewhere. So will AppleTV.

For example, Apple recognized that the original 40 gigabyte hard drive wasn’t sufficient for the early adopter AppleTV customers who make public noise, so they responded with an option.

Apple recognized an opportunity to partner with the folks at Google to get their popular YouTube videos in higher quality and available for AppleTV.

Also missing in action is the ability to buy or rent movies directly through AppleTV, bypassing the need to visit your Mac or PC and iTunes. Look for that feature to show up in the future.

There’s no DVD player in AppleTV, or no ability to stream your DVD movies from Mac or PC to AppleTV. Yet. Look for one or the other in the near future.

Why? With the right balance of features and capability and ease of use and low price, Apple is uniquely positioned, thanks to over 120 million iTunes users, to impact the DVD and TV industries.

Instead of watching the standard crapola fare of TV, future AppleTV users will instead watch what they want via iTunes. Instead of running to Wal-Mart for the latest CDs and DVDs, iTunes customers may be content to sit in front of the screen and order what they want.

Apple has shown remarkable patience and discipline regarding product development in recent years. When was the last dud? It was back in the 90s with the Cube.

As hundreds of thousands of AppleTVs begin creeping into the millions within a couple of years, Apple will have added a laundry list of features and capabilities that take the Not Ready For Prime Time product into the Must Have™ category.

iTunes and AppleTV are a trojan horse which will ride the wave toward High Definition video running on millions of wide screen LCD and Plasma TVs. It’s priced right, it’s easy to set up and run, works great Mac and Windows, and it will get better over time.

For now, I’m holding on to my money to see how quickly Apple advances the software on AppleTV, and how quickly they advance the features on iTunes. It won’t be long.