This second version of Apple TV (also commonly known as Apple TV 2) dumped its forebear's 40GB of local storage, chopped its footprint by three-quarters and halved its UK price down to £99.
But its real advance only became apparent when iOS 5 was released in October 2011, which is why we're updating this review, first published when Apple TV 2 was released in 2010.
iOS 5 has opened up Apple TV to a whole new level of functionality, which means that if you're an iPad, iPhone or iPod touch owner its well worth reconsidering Apple's little black box if you don't already own one, because it just developed a reason to exist.
Perhaps we're being a bit harsh though – Apple TV has always been a darn good media streamer to use with your Mac/PC. You simply plug it into your HD TV via a HDMI cable and connect it to your Wi-Fi network using the on-screen menus and you're good to go.
But while Apple's 2010 refresh saw a welcome reduction in its price, it still wasn't clear what the point of Apple TV was.
The biggest confusion is that it still doesn't let you do what its name would suggest - i.e. watch TV channels over the Internet.
Instead its a device for streaming your media from iTunes on your Mac or PC for playback on your TV over Wi-Fi using a system called AirPlay, or for renting or buying movies directly from the iTunes Store, cutting your computer out of the equation altogether. That's all well and good, but it's only with the most recent update to iOS that Apple TV has really found its feet.
The first exciting feature that hooks up Apple TV and iOS 5 is mirroring, in which everything that appears on your iPad/iPhone/iPod touch's screen also appears on your TV as you use it.
This has many obvious applications - from a quick way to display photos from your iPhone to a teacher giving a presentation in a classroom, but gaming is the most exciting one.
Some iOS games, like Real Racing 2 HD or Modern Combat 3take simple mirroring to the next level, enabling you to use your iPhone as the controller for the game, which is displayed on your TV, effectively moving you into proper games console territory: There's you on the sofa, your iPhone in your hand as a controller and the game on your big screen TV with no wires getting in the way.
Anyone who has ever had any experience of doing anything complicated over Wi-Fi might be forgiven for thinking this is a venture doomed to be a laggy mess of bad connections and random error messages, but amazingly it's not - in true Apple style it just works.
Just watch this video of Modern Combat 3 playing on an iPhone 4S connected to an Apple TV 2 to see what a simple and elegant solution it is.
It's almost perfect, and games like Real Racing where you use the accelerometer to 'steer' your car work really well. The only problem is the lack of physical buttons on the iPhone mean you often have to look down at the iPhone's screen to make sure you've got your thumb in the right place to fire, which spoils the experience somewhat.
Next is Photo Stream. Photo Stream is part of Apple's free iCloud service - its designed to give you quick access to any photos you've taken on one device on all your devices.
So, take a photo on your iPhone and it automatically appears on your computer and all your other iOS devices automatically, without having to sync.
To make all this work you have a Photo Stream album connected to your Apple ID that lives in the cloud, and Apple TV can now access this album displaying your photos with ease. So, you can take pictures of the kids at your school's sports day, then watch them back on your Apple TV when you get back to the house without having to manually upload them somewhere, or go anywhere near your computer.
They just appear there as if by magic. And of course Apple present your photos beautifully too - the slideshows are gorgeous, with a large variety of styles from polaroid-like snaps to classy reflections.
iOS 5 also supports Airplay streaming from your iOS devices to Apple TV, so you can stream a movie from your iPad to your Apple TV, as well as from your Mac or PC. Again, it's as simple as could be - when you play a movie there's an Airplay button that turns blue when it detects an Apple TV on your Wi-Fi network.
Just tap this, select Apple TV and it throws the movie over to the Apple TV where it immediately starts playing. It works equally well with music from your iOS 5's iPod app.
Since we first reviewed the new Apple TV back in 2010 the menu system has changed quite a bit, and for the better we might add, but before we look at that let's recap the hardware.
The rear of the device now only has HDMI for video (but no HDMI cable in the box, so you'll need to bring your own), optical audio and Ethernet, though 802.11n wireless networking is built in. Dumping other video inputs makes sense, though it will annoy some as will the lack of phono audio outputs.
Inside is Apple's A4 processor, now one generation behind compared to the iPad 2 and iPhone 4S, but still perfectly capable. It doesn't make a sound when its on either, so it won't distract you while you're watching a movie with whirring fans like some PCs can when used as a home media centre.
A shiny new aluminium Apple remote is included with the Apple TV, though you can also control Apple TV with Apple's Remote app available for iPad, iPod touch and iPhone.
Interface
Apple TV works seamlessly with any iTunes 10 install with Home Sharing enabled – all you need to do to set it up is enter your Wi-Fi password and then the sync is performed using your Apple ID. Once that's done all the content from your iTunes library will be available (so long as your computer is connected to the network and iTunes is opened, that is).
The inclusion of the A4 processor makes Apple TV absolutely zip through menus and, having used various media streaming devices, this is certainly the most responsive we've tested. The menus are extremely simple to use - the Apple TV controller only has a click-wheel style navigation buttons and a menu and play/pause button.
Our only gripe being that there's no easy way to go back to the top menu level - pressing the Menu button takes you back up one level, but if you've watched several YouTube videos, for example, you have to go back through each one a click at a time to get back to the menu.
In the US new Apple TV has expands on the UK's four main menus - Movies, Internet, Computers and Settings to include TV Shows, Music, Podcasts and Photos at the top level, but here in the UK we still have just the four menu headings, with Podcasts and Photo Stream hidden away in the Internet menu. As this suggests, there's no way of browsing or buying TV Shows and Music on the Apple TV in the UK - you're limited to purchasing Movies. Your only options for buying TV shows and music is to purchase on a Mac or PC, then stream them across.
The best thing about the Apple TV interface is that content is presented so nicely. The Movies selection is pretty good - it's current and you can view trailers for everything before deciding to purchase. iTunes rentals are available for £3.49 for HD films, £2.49 for SD – you have 30 days to start watching and then 48 hours to finish once you've clicked to rent. You can also view trailers for films in theatres.
The Internet menu is where the rest of the action is. The Podcasts selection again looks nice, and sensibly enables you to just browse all the video podcasts on offer - there's a Featured collection and a Top Podcasts selection, which is a great way to discover new content.
Another example of Apple TV's US bias is the MLB.TV option - that's Major League Baseball, in case you didn't know. If you have a (paid-for) subscription then there's an option to view live games. There's also an option to view the free Wall Street Journal Live for financial-related news. We'd preferred to see a BBC option here for a UK audience instead.
For video there's YouTube and Vimeo. Both of these are superb, enabling you to search for content easily and you can log in with your YouTube user name, so that your Favorites are easily accessible. The on-screen keyboard you use for searches is merely adequate for the task - there is none of that usual Apple inventiveness here, but then, Apple's determination to have a simple remote is the source of the frustration.
Actually playing video - whether from your own PC or Mac using AirPlay or from YouTube or one of the other Internet services - is responsive and the experience is, by and large, pleasant. You can do all the usual things like fast forward, rewind, pause and play.
There's also a Flickr option, but we found integration slightly sluggish. We've already touched on Photo Stream, but again, we should stress how beautifully everything is presented, and the only menu option really letting the side down here is the Radio entry, which is as terrible as it is in iTunes itself - just a basic category tree. Where is a decent search? Or a Favourites option?
From a UK perspective more could definitely be done though. What about iPlayer? Like the ITV and Channel 4 players, it's nowhere to be seen, and frankly, we don't really care about baseball - where's the cricket coverage?
Home Sharing
So, to the Computers menu. You'll need to enable Home Sharing in iTunes on your Mac or PC first and this works alongside your Apple ID.
It's a real shame that the Apple TV can't stream content from an iTunes Server on a network storage device. Some have managed to get this working by hacking Apple TV boxes in the past, but it seems absolutely crazy of Apple to restrict this. Why should you have to have your Mac or PC running to stream media? And also, why does it have to be in iTunes first?
Vast improvements have been made to viewing your own content on the Apple TV 2 from its initial release though. When it comes to music you get album art, although not the nice Cover Flow view you may have been expecting - why Apple hasn't included this great browsing method in Apple TV's software is anybody's guess, because it seems like such a natural fit.
And there's no visualiser or any groovy visuals to accompany your music, which is disappointing considering the efforts Apple has gone to when displaying photos. You could however start an album playing then head off to your photos collection and start a slideshow, but it feels like a lot of hassle to go to. We'd rather have an option right there to just have something nice to look at when playing music.
Your Movies are now grouped by either genre, alphabetically or you can go straight to anything that is unwatched. There's no search option - you simply have to scroll through a list, but unless you've got a massive movies collection that shouldn't be a problem. There's also a preview thumbnail of each movie to help you find what you're looking for. Your TV Shows and Podcasts use exactly the same menu system.
Finally there's the Photos menu - here you can look at any photos from your iPhoto album on a Mac with ease using great slideshows.
Despite its simplicity, Apple TV does have a lot of settings you can tweak, plus a screensaver you can change. You can use your own photos in the screen saver, too - providing they are synchronised with iTunes on your computer. There's also your Photo Stream which you can use as a screen saver.
Apple TV is still one of the best media streamers you can get, and is holding off the challenge from Google TV well (we've still to see a Google TV launch in the UK, and Logitech has recently given up on it altogether And while we'd love it if it actually played TV channels the iOS 5 enhancements add yet another string to its bow, and turn it into a must-have device for iOS device owners.
But while we love Apple TV it still has three big issues.
When it comes to performance Apple TV is still the most reliable media streamer we've seen. But this reliability comes at a cost - and that's flexibility. Other streamers can take content from NAS devices and other sources, but Apple TV needs you to have your Mac or PC on, and the media to be inside your iTunes library to work effectively. It seems a bit draconian, but then again so is Apple. But the boons are reliability and speed - Apple TV simply can't be beaten here.
The second is to do with the UK. In the US, the box is compatible with Netflix, providing video on demand TV programmes and movies for a fee. In the UK, there is no such service available for Apple TV. LoveFilm would be an obvious partner, but it hasn't happened yet.
We also don't get the same menu options that are available in the US - we can't buy or rent TV Shows on the Apple TV yet, for example. We hope these things will be added over time, but right now US users are definitely getting a better deal. Some of the content - like the baseball channel - is obviously more suited to the US market too, and we'd love it if Apple would wake up and serve the demands of its UK audience and integrate iPlayer.
You can get iPlayer on the Wii for heaven's sake - how difficulty would it be to get it on Apple TV?
Finally, while the Apple TV can output 1080p, movies are only available as 720p HD – the lack of 1080p support remains bewildering and really marks the Apple TV as a poor relation to other streaming media boxes such as the WD TV Live – even if the Apple TV is a more polished user experience.
We liked
Apple TV is very quick and responsive, and that alone is enough to recommend it highly. The menus and photo slideshows look stunning, too. Last year's A4 processor is still holding up well and the Internet streaming video works very well - YouTube especially. Apple TV is also very stable streaming content from your Mac or PC. The integration with iOS 5 is top-notch, and mirroring can turn a mobile device into a games console with considerable ease. Airplay works like a dream from a Mac, PC or iOS device and Photo Stream takes all the hassles out of getting your shots onto your TV to display.
We disliked
The over-reliance on rentals and lack of a Netflix-like, or even an iPlayer, service is a problem. Apple also needs to loosen up its vice-like grip over the file formats that Apple TV can play. The lack of 1080p HD content is also unforgivable and is a real limitation for iTunes. There are also no cables included in the box aside from the power, so you'll need to buy them. We also need more UK content.
Verdict
The iOS 5 integration means Apple TV is really finding its feet at last. While it was once a curious enigma it now feels like part of the Apple family and integrates beautifully with your Mac and iOS device. The interface is fantastic and the speed and execution of playing media is great, the lack of 1080p is a big miss.
Likewise it's a pain to have to have your Mac or PC on to stream content directly from iTunes. It guarantees reliability, but it's inflexible. At least the price is now cheap enough that, like Apple, you can consider the purchase somewhat of a hobby.
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