Apple TV gets a price drop

Apple has never given Apple TV a whole lot of public marketing support – and, as a result, the product has never been a runaway hit for the company. The marketing is still lacking, but there seems to be some movement occurring with the device.

Apple has quietly discontinued the 40 GB model of the set top box and cut the price of the 160GB model by $100 to $229.

There are several possible reasons behind the move… Apple could be slowly shuttering the division (it has, after all, referred to Apple TV has a “hobby” many times in the past). It could be a proactive move to distract attention away from tomorrow’s launch of the Zune HD by Microsoft. Or the company could be dumping inventory as it gets ready to unveil a new product.

Piper Jaffrey analyst Gene Munster would probably argue the later. He accurately predicted the price cut over a week ago and has also speculated that Apple is planning to add DVR capabilities to the device.

If that turns out to be true, it could make Apple TV a potential player in the digital hub battle that Microsoft, Sony and the cable companies are fighting right now. Apple made no secret of the fact that it’s going after game companies in its press event on Sept. 9. Perhaps an upgraded Apple TV, with enhanced television offerings and the ability to incorporate selected apps is the next step in that attack.