Will Apple (Nasdaq: AAPL) revolutionize TV the same way it previously revolutionized MP3 players and smartphones? Earlier today, Apple announced a drastic price cut on its Apple TV players and a deal that allows 99-cent streaming video rentals. While the company's refreshed Apple TV might not have the immediate impact of the iPod, iPhone, or iPad, Apple investors should be excited. The company is staying committed to the lucrative home entertainment market.

Don't forget the iPod
Beyond Apple TV, there were a number of interesting announcements from today's event:

  • Apple is now activating more than 230,000 devices per day using its iOS operating system. Products that use the iOS include the iPhone, iPod touches, and iPads. That number was likely a dig at Google's (Nasdaq: GOOG) never-ending reports boasting of increasing Android activation numbers. As of earlier this month, Google had said it was activating 200,000 a day; I'm sure Steve Jobs got a little satisfaction one-upping that estimate. Oh, and he also made sure to include the fact that Apple's activation doesn't include upgrades, while the Androids does.
  • The company announced a game center for iOS. Apple has approximately 35,000 games in its app store, as well as the support of several leading developers. The game center, which allows match making and leaderboards, adds another layer of complexity to iOS as a gaming system at a time when Microsoft (Nasdaq: MSFT) looks to integrate Xbox Live as a key selling point of its new Windows Phone 7.
  • Regarding the iPods, first, Apple plans on releasing a new Shuffle that costs $49 and has buttons. Second, reports of a touch-screen Nano proved correct -- the Nano is now almost 50% smaller and sports a clip. That increased portability is important. As more consumers buy smartphones that can store media, Apple needs to continue finding ways to sell the Nano to users who already carry around a device with the same capability.

Your home, Apple's opportunity
And now to the main course: Apple TV. On Monday I wrote about the vast opportunities in the home entertainment market, and suggested that Apple keep some "skin in the game," even if sales continue to be trivial relative to its overall bottom line. However, Apple had sent out invitations featuring a guitar to the event, leading many to speculate that rumors of a refreshed Apple TV would prove false.

Luckily for Apple shareholders, Apple TV got the makeover it needed. Steve Jobs announced a new Apple TV that can stream HD, has Netflix (Nasdaq: NFLX) streaming support, features media deals that allow 99-cent TV show rentals, and only costs $99.

Even after the refresh, Apple TV remains another "additive" box to the home entertainment center. It doesn't perform the same functions as a DVR and won't be replacing set-top boxes in the near future. However, it does keep Apple in the race to one day control the home entertainment market.

Look long-term
The home entertainment market is extremely lucrative, but there are significant barriers for Microsoft, Google, and Apple, which are all eager to grab a slice of the spending pie. Cable companies subsidize set-top boxes, making it difficult to sell high volumes of competing products with DVRs. Also, while a set-top box such as Google TV could conceivably serve up contextual ads and disrupt the television advertising status quo, contracts and long-established relationships between cable companies and media outlets are a major roadblock to a Google or an Apple getting more revenue out of the market.

I won't dare guess how many Apple TVs the company could sell. At $99, it's cheap enough for users who merely want to stream Netflix and watch cheap rentals on their TV; the low price point should fuel a good number of sales. However, I'm looking long-term on this product. While the status quo in television might be strong today, 10 years ago few would have imagined the effect a platform like iTunes would have on the music industry.

Apple's collecting smaller Apple TV sales today, but doing so with one eye to the future. Don't judge any middling sales in the short term -- today's Apple TV is just a stop-gap while the company plots a way into this untapped market.

Fool.com analyst Eric Bleeker does not own shares of any companies mentioned. Google and Microsoft are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers pick. Apple and Netflix are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.