The latest iteration of Apple TV, unveiled last week, faces a "far more challenging market" than its predecessors, according to IMS Research, which suggests that moves to streamline the device might not be enough to secure significant traction with the public.

The new version now has a sub-US$ 100 price tag (but no local storage), a smaller form factor, a move to streaming-only, and the addition of Internet-based services such as Netflix, YouTube and Flickr access.

However, according to Paul Erickson, Senior Analyst at IMS Research, this might not be enough: “Today’s competitors are the devices that are already in, or going into consumer households – Blu-ray Disc (BD) players, games consoles, and connected TVs.  These devices already integrate similar access to paid and free content.  Of these, the most dangerous competitors are games consoles and BD players – both of which arguably trump Apple TV in terms of must-buy priority for consumers.”

Mr. Erickson cites high pay-TV penetration as being another potential hurdle for the device, while HD VOD and DVR services are already well-adopted in mature markets, and already available from all major pay-TV providers.  Meanwhile, online media services such as Netflix and YouTube are already available on many CE devices, including games consoles, connected TVs and Blu-ray Disc players.

“Apple TV faces the strongest competitive environment for over-the-top video to date," added Mr. Erickson.  "As such, it does not seem to address a sufficient enough value gap in the market to entice people to buy it en masse, due to the near-similar functionality that is already integrated into the Blu-ray Disc players, game consoles, and connected TVs they’ve already bought or are buying today.”