Apple TV: Good news and bad

October 6, 2010, 2:57 PM UTC

“The hobby is a hit!” declares one analyst, but a head-to-head review gives the nod to Roku

Photo: Michael Copeland

“Apple TV is selling out across the nation,” screams the headline of an unusually enthusiastic note to clients issued Wednesday by JMP Securities’ Alex Gauna.

“We were not particularly surprised when we couldn’t get our hands on the Apple TV over this past introductory weekend in San Francisco,” he writes, “but when the scarcity persisted into this week it got us to checking and we subsequently learned that stores across the nation were selling out of their inventory on the same day as receipt in Boston, Chicago, New York, and Washington D.C.”

“Online representatives,” he adds, “have characterized demand as ‘amazing.'”

Not so amazed was Frost and Sullivan’s Dan Rayburn, who posted a pretty thorough head-to-head comparison Tuesday of the Apple TV with the top-of-the-line Roku XDS. “If I was trying to decide where to spend my $99,” he concludes, “Roku would be the hands down winner.”

Rayburn cites several good reasons for his preference, from Roku’s support of 1080p (Apple TV stops at 720p) to a USB port that’s good for more than “service and support.”

“While Roku’s interface [may] not be as polished as the Apple TV,” he writes, “the Roku makes up for it with all the great content that’s available. Roku has channels for Netflix, Amazon Video On Demand, MLB.TV, UFC, Pandora, Flickr, Facebook Photos and Roku has just announced support for Hulu Plus coming later this year. Roku has more than 75 content channels and expects to have nearly 100 by the end of the year. Roku has an open SDK and as a result, has a lot of content partners working to bring more channels to Roku devices. Compare that to the Apple TV which today has no SDK and doesn’t run any apps on the box. Some are speculating that the Apple TV will run apps in the future since internally it has 8GB of Flash storage, but none of that is happening today.”

The deal breaker for me was that Apple assumes you already own an HDTV. Without one, Steve Jobs’ hobby is a $99 door stop. Roku, by contrast, was considerate enough to include composite (red, white, yellow) plugs on the back of its box, next to the HDMI port.

“So on one hand,” Rayburn writes, “Apple only supports the new HDMI connection for newer TVs, yet doesn’t support 1080p which most new TVs support. That does not make a lot of sense.”

[Follow Philip Elmer-DeWitt on Twitter @philiped]