What is it lacking that the 4th has besides 4K?
The 4th gen ATV does not have 4k, but the fifth gen does.
As previously mentioned, the ATV3 does not have an app store, and all the channels are preloaded. It my opinion, the ATV3 apps are much better than the ATV4 and ATV4k versions, so if you would only use a few apps, and they are already on the ATV3, I would just use that.
The ATV4 and ATV4k has a different OS called tvOS, which is more modern, and has an app store. There are a lot of apps to choose from, genres from streaming apps, shopping, games, entertainment, education, and many of which are also on the iOS.
Also, what does Apple TV do that say my smart TV doesn’t do.
The Smart TV apps are probably limited compared to the tvOS App Store, I doubt there are too many games available for Smart TVs.
Many of the tvOS apps synch with the iOS counterparts, like games for example.
This is just a guess, but I bet that the tvOS and its apps will be updated and support longer and more often than the Smart TVs. For example, My parents bought a Smart TV a few months before Netflix launched its profiles feature, but there was never an update on my parents' Smart TV's Netflix app.
Personally, I would recommend a streaming box like the ATV over Smart TV apps for the reasons already mentioned. Also because one thing that you can do with your ATV, but not a Smart TV (at least not easily), is take it with you when you travel. You can use it on a hotel's TV, or when staying at someone home.
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If you really like the "3", consider the 4K or 4 for faster hardware,
In my experience, even though the hardware is not as advanced, the ATV3 is faster, smoother, and less buggy than the ATV4. But, the ATV4k does seems faster and smoother UI than the ATV4.
The biggest differences, beyond just the 4/4K having access to the App Store which the 3 does not is all the specs are improved. Faster Wi-Fi, Gigabit Ethernet and faster and more powerful processor for improved UI response.
The ATV4 does not have Gigabit ethernet, and in my experience, is slower than the ATV3. The ATV4K seems like a big improvement over the ATV4 though, and the above statement would be a fitting description of it.