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Apple Partners With YouTube

Apple today announced it's giving its floundering Apple TV something it has yet to gain, besides an audience: content. The company struck a deal with Google's YouTube video streaming service to provide originally-created content on Apple TV.

Separately, and perhaps because of the YouTube deal, Apple  announced it will offer a second line of Apple TV units, this time with a 160GB hard drive. The original Apple TV unit with a 40GB drive will remain on the market.

The 160GB unit means a quadrupling of storage capability, so it will be able to hold up to 200 hours of video or 36,000 songs or 25,000 photos or a lesser combination of each. The 40GB version of Apple TV will continue to sell for $299 while the 160GB version sells for $399.

Apple will offer a free software upgrade to Apple TV subscribers in mid-June. Once the device is patched, Apple TV will wirelessly stream videos directly from YouTube and play them on a user's TV. Thousands of the most current and popular YouTube videos will be available on Apple TV at launch, with YouTube adding thousands more each week until the entire YouTube catalog is available this fall.

Apple TV is already integrated with Apple's iTunes digital download service to play content off the user's PC or Macintosh computers. iTunes offers Apple TV users more than 500 movies and 350 TV shows in near-DVD quality, more than five million songs, 5,000 music videos, 100,000 podcasts and 20,000 audiobooks.

"This is the first time users can easily browse, find and watch YouTube videos right from their living room couch, and it's really, really fun," said Steve Jobs, Apple's CEO, in a statement.

The quality of Apple TV content remains to be seen. Most YouTube video is grainy and blocky when watched in a window on a PC, to say nothing of what it would look like on a high definition TV. An Apple spokesperson contacted by internetnews.com declined to comment on whether any special, high definition content would be available for YouTube.

Apple TV needs all the help it can get. Fortune magazine is the latest to call it a failure. Analyst Rob Enderle of The Enderle Group said Apple TV has been "a spectacular failure" and wonders if the YouTube deal will help.

"The YouTube deal is nice but they don't have any high def content and that's what counts," he told internetnews.com. "The problem with the player has always been content. That box has to get a lot of decent content for that device to recover. To make all that hoopla on HDMI connectors and not have any HD content was ridiculous."

Apple broke its own model that made the iPod a success: easy to use, a good service and lots of applicable content. Apple TV needs high definition video to make some headway, said Enderle.