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Deutsche Bank's Chris Whitmore believes that as the variety and quantity of video content available for Apple TV increases, Apple could eat into the DVD player market worth $26 billion in the US alone. He said that capturing just five per cent of the DVD market could around 10 per cent per share to Apple's annual earnings

'We expect Apple to continue adding video content (TV, movies, etc.) to iTunes/Apple TV further increasing its appeal,' Whitmore wrote in a note to investors, adding that Apple TV will eventually be 'a compelling integrated home media infrastructure solution'.

Last week Apple announced that from the middle of this month Apple TV owners will be able to stream YouTube videos to their television set.

UBS analyst Ben Reitzes agrees that content will be the key to Apple TV's success. Like Whitmore, he believes that with more content, Apple TV 'could be considered as a DVD replacement'.

Both analysts' comments contrast markedly with the widely reported thoughts of Brent Schlender, 'editor-at-large' for business magazine Fortune, in an article that described Apple TV as a dud.

'There are shortcomings that even Microsoft would not have overlooked: Apple TV doesn't have a DVD drive,'

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he wrote. That is one 'shortcoming' that Whitmore and Reitzes appear to dismiss - Apple TV will not need a DVD drive if the same content is available elsewhere, and more conveniently. Adding a DVD player would have added to Apple TV's cost and required additional cooling; no to mention that Apple TV customers are already certain to have a DVD player already attached to their TV. The ideal strategy for Apple would have been to allow streaming of DVDs from a computer, but the licensing terms for DVD playback do not permit this.

While some of Schendler's other criticisms are certainly valid, his argument falls down in several places because what he says is simply not true. For example he states that Apple TV 'requires an HDTV' - not true, Apple specifies only a widescreen TV; and the Apple Remote does not have a volume control - it does.

While Schendler does raise some valid questions - such as the fact that Apple TV can only be linked to content on one computer - RoughlyDrafted argues that he is missing the point.

'Apple TV does need some updates, but those are easy to deliver. Had Apple hamstrung the device's hardware in stupid ways, it might have been dud-worthy,' the vehemently pro-Apple blog notes.

'In reality however, Apple TV is an expertly designed, low power computer with the potential to deliver very high quality content. Like the iPod, it can present video purchased from iTunes as well as video from other sources: DVD with a rip, home camcorders, podcasts, and soon, YouTube.'