What is the center of your digital home?  To the majority of the population, it’s not a question that’s asked or even remotely understood.  If we rephrased the question, you might be able to answer it a bit better.  Where do you keep all of your music, movies and photos?  An educated guess on our part would be that the average AnandTech reader keeps most of his digital content on his/her computer, thus making the PC the center of the digital home. 

Microsoft would be quite happy with that assessment but there’s one key distinction: PC does not have to mean Windows PC, it could very well mean a Mac.  Both Microsoft and Apple have made significant headway into fleshing out the digital home.  Microsoft’s attempts have been more pronounced; the initial release of Windows XP Media Center Edition was an obvious attempt at jump starting the era of the digital home.  Microsoft’s Xbox 360 and even Windows Vista are both clear attempts to give Microsoft a significant role in the digital home.  Microsoft wants you to keep your content on a Vista PC, whether it be music or movies or more, and then stream it to an Xbox 360 or copy it to a Zune to take it with you.

Apple’s approach, to date, has been far more subtle.  While the iPod paved a crystal clear way for you to take your content with you, Apple had not done much to let you move your content around your home.  If you have multiple computers running iTunes you can easily share libraries, but Apple didn’t apply its usual elegant simplicity to bridging the gap between your computer and your TV; Apple TV is the product that aims to change that.

Apple TV is nothing more than Apple’s attempt at a digital media extender, a box designed to take content from your computer and make it accessible on a TV.  As Microsoft discovered with Media Center, you need a drastically different user interface if you're going to be connected to a TV.  Thus the (expensive) idea of simply hooking your computer up to your TV died and was replaced with a much better alternative: keep your computer in place and just stream content from it to dumb terminals that will display it on a TV, hence the birth of the media extender.  Whole-house networking became more popular, and barriers were broken with the widespread use of wireless technologies, paving the way for networked media extenders to enter the home.

The problem is that most of these media extenders were simply useless devices.  They were either too expensive or too restrictive with what content you could play back on them.  Then there were the usual concerns about performance and UI, not to mention compatibility with various platforms. 

Microsoft has tried its hands at the media extender market, the latest attempt being the Xbox 360.  If you've got Vista or XP Media Center Edition, the Xbox 360 can act like a media extender for content stored on your PC.  With an installed user base of over 10 million, it's arguably the most pervasive PC media extender currently available.  But now it's Apple's try.

Skeptics are welcome, as conquering the media extender market is not as easy as delivering a simple UI.  If that's all it took we'd have a lot of confidence in Apple, but the  requirements for success are much higher here.  Believe it or not, but the iPod's success was largely due to the fact that you could play both legal and pirated content on it; the success of the iTunes Store came after the fact. 

The iPod didn't discriminate, if you had a MP3 it'd play it.  Media extenders aren't as forgiving, mostly because hardware makers are afraid of the ramifications of building a device that is used predominantly for pirated content.  Apple, obviously with close ties to content providers, isn't going to release something that is exceptionally flexible (although there is hope for the unit from within the mod community).  Apple TV will only play H.264 or MPEG-4 encoded video, with bit rate, resolution and frame rate restrictions (we'll get into the specifics later); there's no native support for DivX, XviD, MPEG-2 or WMV. 

Already lacking the the ability to play all of your content, is there any hope for Apple TV or will it go down in history as another Apple product that just never caught on?