Apple Inc. discontinued its 40GB Apple TV and cut the price of its 160GB model $100 to $229 on Monday. However, critics are arguing that Apple TV won't see any real success until it opens up to Web video beyond iTunes despite price cuts.

Apple TV, a set-top that connects users' iTunes and video libraries to their televisions, was once famously described by CEO Steve Jobs as the company's hobby.

That new price for the 160GB model was the old price for the 40GB model, which is no more, and that is cause for speculation in itself.

Piper Jaffray's Apple analyst Gene Munster is predicting a major software update for the device in the near future, though, as Apple's new iTunes LP bundles may have been formatted specifically for it. He has suggested this upgrade will revolve around a new iTunes subscription service.

Munster has said he believes a new Apple TV would increase video purchases if a subscription model were to be offered. He believes the popularity of Hulu and Netflix Instant Watch are evidence of this.

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