Earlier this week, Apple discontinued the 40GB Apple TV and slashed the price of the 160GB Apple TV from $329 to $229. While this was seen as a positive move, it also caused people to wonder anew about Apple’s long terms plans for the device.

Right now, Apple TV is designed to deliver the iTunes experience to your living room. You can use Apple TV to rent or purchase HD movies and TV shows, stream iTunes music from your Mac to your living room stereo, watch podcasts and YouTube videos, and view your digital photos, all on your big screen TV from the comfort of your couch. Apple TV also makes it very easy to stream and download media from from networked Macs. In my experience Apple TV delivers these functions as promised.

However, like many people I’m wondering where Apple is ultimately going with Apple TV. Code hidden in iTunes 9 seems to hint at an upcoming Apple TV software update that will a least support some of iTunes 9’s new functions, such as iTunes LP and Home Sync (updates for Apple TV have always been free in the past).

Industry commentators and consumers are wondering if the Apple TV will ever become a full-fledged DVR, or if it will allow full Internet access from the couch. People also wonder if Apple TV will ever support streaming services such as Hulu or Netflix.

All of those functions are possible via the Mac mini, which is now $370 more expensive than the Apple TV (though it is considerably more powerful and of course works as a full-fledged computer).

I agree that among Apple’s mature product offerings, the Apple TV is sort of an awkward teenager. However, many actual Apple TV owners seem to appreciate it for what it is—a simple, easy to use device for getting the iTunes experience on a big television. I could come up with a long wish list for a future Apple TV, but that might simply complicate it and ultimately reduce its appeal.

Do you own an Apple TV? Are you thinking of getting one? Let us know what you think of the device and we’ll post your comments in a future Kibbles & Bytes!

Further reading on Apple TV:

Why Apple TV Must Evolve to Avoid Extinction

Apple TV: What happens now?

Apple Drops 40GB Apple TV and Discounts 160GB Model to $229

Click here to view the Apple TV on sale at Smalldog.com

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