An Apple TV, which would run the company's operating system, would allow people to do many things with their televisions they cannot do now. The most important of these would probably be the ability to run Apple apps. This would permit consumers to download applications from Apple's store which has hundreds of thousands of products. The Apple TV would allow people to switch from Facebook to Google to their calendars all on one device in the living room.
Apple's risk of failure is greater than it was in the multimedia, smartphone, and tablet markets. The iPod was launched into market in which multimedia devices were cumbersome and a great deal of music was pirated. The iPod was a first-of-its-kind device with seamless controls. The related ITunes store was a single stop shop for what became thousands and thousands of songs, all available at one place.
Apple's risk is that the TV market is already crowded. A number of large consumer electronics companies make screens. More importantly, the television in the consumer's home is already attached to an array of powerful boxes from NetFlix (NFLX), cable companies, satellite TV firms, and game console manufactures which include Microsoft (MSFT) and Sony (SNE).