“The biggest problem with Apple TV: It doesn’t replace anything. It’s yet another box hooked up to your TV that many people don’t have room for — space-wise, money-wise, HD video port-wise, etc.,” Dan Frommer opines or Silicon Alley Insider.

“So Apple’s first step should be to throw a disc reader in there and make it a high-end DVD player replacement, something people will still need/use for years, for $199 or less. Then, get a good deal from Sony to offer a premium Blu-ray edition for cheap — $399 tops; ideally $299 or less. And now you have a much, much bigger potential market than if Apple TV were just an iTunes player,” Frommer writes.

“After that: As we’ve said in the past, open it up a bit. Make Apple TV the go-to box for people to watch any Internet video on their TVs, not just iTunes or Google’s YouTube. Add Safari with Adobe Flash and Microsoft Silverlight plugins so we can watch MLB.TV, Hulu, ESPN 360, ABC/NBC/CBS shows, etc.,” Frommer writes. “Even support iTunes rivals like Amazon’s new streaming service, and Netflix streaming, when it’s available for Mac.”

Frommer writes, “If Apple were to combine something many people want — a set-top box that can display all Internet video on a TV — with a DVD player, something that people are still going to need for years — then Apple TV might take off.”

More in the full article here.