The AppleTV has a digital audio out.

It does shut down, at least I get the impression that the hard drive
has gone to sleep because its initial startup after not being used for
awhile is always a couple of seconds, whereas while in use the feedback
from the remote is instantaneous.  I understand that the hard drive has
to spin up just like in a computer hard drive that has gone to sleep
while in power saving mode.

Be careful about reviews.  The AppleTV has gone through several
firmware updates since initial release and you need to make sure you
are looking at a recent review.  Older reviews won't help you because
they were based upon out of date firmwares.   

I have the AppleTV and my review is that it works great.  No complaints
at all.  It does what it says it does, and no configuration issues.  It
works with my computer, it works standalone, it works with my iPod
Touch.

It looks great on my HDTV, it sounds great on my stereo system.

It is easy to control the AppleTV with the included remote.

Now that my iPod Touch (or iPhone) includes the new "remote"
application, it is even better.  Don't need the TV on or even connected
to choose what music to listen to.

As far as Logitech's response to this, I have seen wishlists on this
forum that have mentioned a squeezebox with built-in harddrive.  That
would be a serious competitor.  Thus no need for your computer to be
on, no need for the configuration issues of an NAS.  That is what
AppleTV gives you.  That is what Logitech may need to meet this
challenge.

And to take this even further,  with the continual fall in price of
laptops, e.g. the Asus Eee PC,  you could just hook up a laptop
directly to your stereo system and use an iPod Touch to control your
music and other services.  There is an evolution occurring that is
blurring the lines in the conjunction of a standalone music device and
an all-purpose computer.

I am sure Logitech is not standing still and is taking note of these
developments.

My own observation is that if Logitech wants to break out of the
hobbyist niche and into the mainstream, it has to focus on ease of use.
That means eliminate the need for configuration issues, just make it
work right out of the box (of course it can keep this option for
advanced users).  Anything that makes it hard to use a product builds
in resistance to its adoption for the general consumer.  This is where
Apple excels.  It has its own ecosystem of hardware and software that
talks to each other flawlessly and easily.


-- 
mortslim
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