Apple TV isn't Catching on, Analyst Says

Apple may have had high hopes for its first generation Apple TV, but analyst sales estimates indicate the product is not as successful as once thought. Blaming the iTunes video revolution that never happened, market research firm, Forrester said the Apple TV failed to catch on with consumers.

Forrester predicted in May that Apple would sell 1 million Apple TVs by year end, counting largely on the Apple faithful to purchase the device. That is not the case anymore.

"In addition to the 400,000 Apple TV units we estimate Apple has sold thus far, the company will be lucky to sell another 400,000 in the year-end holiday rush, short of our one million estimate," said Forrester analyst James McQuivey. "Unfortunately, the same lack of interest in iTunes video will mean the iPhone and the iPod touch have less video momentum to ride."

According to its research, Forrester said that nearly half of all online adults say they have heard of the Apple TV. The company credits Apple's brand and effective marketing reaching consumers.

However, only 5 percent of the people who have heard of the Apple TV and feel they know what it does have either checked out the device in the store or visited the Web site to learn more, said McQuivey.

Purchase intent for the device is at 3 percent, the company said.

McQuivey offered Apple some advice on what it should do to improve the iTunes Store, including bringing back NBC and offering movie rentals.