Lord Hamsa
macrumors 6502a
You may think it is a win for Apple because it sells more units, but they may see it as a losing proposition as it might eat into their iTunes and iCloud sales/rentals/income.
Can't see how. Apple's own recommendation is to download all purchases and back them up yourself, in case they ever become unavailable in the store. You're also not going to sell a lot of units by telling the people most likely to use it that they can't use their own libraries.
Yes, it works as-is, but it's a hacky kludge to have to introduce a third device into the mix, just to act as the iTunes client. Build the client into ATV (it's running iOS anyway, this shouldn't be rocket science to do, and the chip it uses is more than capable of handling the workload), enable the USB port, and allow the ATV owner to point the iTunes client to an external or network drive where the actual library resides. Then you cut out the otherwise unnecessary third device from the communication chain.
It's that simple. And iIt doesn't require any extra on-board storage, or even a form-factor change; it should just be software and firmware as the ATV is already networked and it has the USB port, just disabled.
TV? For example, if we can shoot at 60fps, could the