To: Steve Jobs, CEO, Apple (Nasdaq: AAPL)

From: Tim Beyers, Fool, Mac user, and would-be Apple TV user

Dear Steve,

It's time to end the charade. Apple TV was never a hobby, and it isn't one now. You need to stop talking as if it is, because you're out of time. Smart TV is here. Apple will either lead this market or be left behind.

Your biggest problem is that Apple TV isn't really TV at all. It's a box for delivering iTunes movies, in much the same way that the Roku player delivers streamed video from Netflix (Nasdaq: NFLX). You don't pause live TV like TiVo (Nasdaq: TIVO) does. Nor do you offer a bundle of programming features, as your telephony partner, AT&T (NYSE: T), does with U-verse.

Meanwhile, competitors are attacking this market with renewed vigor. Microsoft (Nasdaq: MSFT) is showing off 3-D television at its new retail store here in Denver, and continues to talk up the PC as a video delivery platform. Cisco predicts that Web video will comprise more than 90% of all consumer Web traffic within four years. And in what may be the most interesting blend of Web and TV content yet, Google (Nasdaq: GOOG) recently announced Google TV.

The Big G isn't going after the smart TV market alone. Both Sony and Logitech (Nasdaq: LOGI) have signed on as hardware partners, specialists who'll embed Googly secret sauce into new devices for viewing television interactively. Can it work? Yes, I think it can, and that ought to scare the beejeezus out of you.

You might even want to get angry. Not at Google generally. We've already seen you do that. I mean that you need to get mad about how Google is copying your innovations, as Microsoft once did.

For example, have you seen the Google Apps marketplace? The general media reporting on this project assumes it borrows from the iTunes App Store to differentiate Apps from Microsoft Office, which is correct. But this could also be a model for extending all of Google's consumer platforms.

Don't just take my word for it. Look at Web version of the search technology behind Google TV, known today as Quick Search Box (QSB).

You should know QSB. It's software for Macs, created by the inventor of Quicksilver, one of the most beloved Mac OS productivity tools of all time. Power users like me extend the software's functionality through simple plug-ins, chunks of code designed to implement a feature with a few keystrokes. I've used it to bookmark pages on Delicious or add tasks to Remember The Milk.

Imagine what happens when Google opens the QSB programming interface to TV developers. Plug-ins could be designed for creating custom menus, instantly calling up recorded programs, matching schedules with episode guides, creating programming reminders, and so on. It'll be everything that Apple TV isn't today, and it'll probably be available at my local electronics retailer.

We interrupt this program for a public service announcement
Some Fools are calling for you to pay a dividend. By the math, they have an irrefutable point. Your company's cash returns stink. But in asking you to give back, these investors -- my colleagues -- are forgetting something crucial. They're forgetting how paranoid you can be. They're forgetting that Apple has been the innovator before, only to give away its lead at the worst possible time.

With Apple TV, you're reaching a similar inflection point. Either cede the market completely, or invest in the platform now to create a truly interactive TV experience, a blend of what Google and Microsoft promise, with perhaps a dash of TiVo thrown in.

Now back to your regularly scheduled programming
And while you're at it, why not also turn to iAd? Yes, I know it's designed for mobile environments. Would it really be so difficult to make the same tools available to iPhone developers, and make them useful for Apple TV developers? (Assuming you can recruit some.)

The battle to be the best interactive TV provider isn't over, but it will be before long. You know that. And having built a multibillion-dollar fortune from a hobbyist PC business over the past three decades, you know better than most that hobbyists compete best against pros when they join the professional ranks. Time to suit up.

Would you buy Apple TV if the company took it more seriously? Discuss in the comments box below.

Apple and Netflix are Motley Fool Stock Advisor selections. Logitech is a Motley Fool Hidden Gems recommendation. Microsoft is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers recommendation. Motley Fool Options has recommended writing covered calls on Logitech and a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool owns shares of Logitech and is also on Twitter as @TheMotleyFool. There goes the Fool's disclosure policy again, playing the star again.