LAS VEGAS -- Glad to see Steve Jobs Apple put storage into its new TV device, called Apple TV.

The interface looks especially nice, though Apple's actually playing catch-up here with Microsoft's Media Center controls.

Software is clearly the great contribution that the PC industry can make to consumer electronics. Hundreds of companies here are building nice entertainment boxes and adding all the right storage and connections. But it's hard to find interfaces that come anywhere close to what Microsoft and Apple have done.

Apple TV is also interesting in light of Microsoft's turning the Xbox into a set-top box. If nothing else, Apple's device will also put pressure on Microsoft to hurry up and add an HDMI port and bigger hard drive to the Xbox. Maybe Microsoft is saving the hardware upgrade news for the spring game conferences.

On the other hand, Apple may have goofed by making it stream only 720p video. I think the 720 vs. 1080 debate is a little overblown, but Apple's device may get thumbs down from enthusiasts who have ponied up for the higher quality 1080 displays. Apple's spec sheet is a little hard to read on this point; it says the device works with 1080p displays, but it also says the device only supports 720 video.

A 720 device may become a question mark for all the people getting ready to make the high-def plunge. They'll be less likely to uses Apple's product as a key piece of their setup if it doesn't seem future-proof.

But the Achilles heel of Apple TV may be a business decision Apple made to protect its iTunes franchise. I haven't seen all the details yet, but if the device only streams content that you buy from iTunes, it doesn't have a big future.

Most of the video content people watch is free, or at least part of their cable or satellite service.

Why would people buy a $299 Apple device and pay $1.99 per show to watch the content they already get for free? It's a convenience to download at will from iTunes, but it's an expensive luxury.

That scenario doesn't come close to the price and flexibility of using a Media Center PC, TiVo or hard-drive video recorder that can record TV shows off the air and play them back on a PC or TV.

Apple's insistence on making people buy content from iTunes could make Macs an also-ran in the coming world of broadband digital video. The iMacs could make great TV-PC combo devices if Apple would build in TV tuners and recording software, but they don't. Maybe that was the deal it made with networks and studios to get content for iTunes.

If Apple TV doesn't work with non-iTunes content, it will indeed lead to a revolution --- among Apple fans who will take up pitchforks and demand freedom to use its great hardware to stream and watch whatever they want, without paying extra.