One of questions we get asked more than we really should here at PC Advisor is 'What is an Apple TV box?'. Here, we explain what Apple TV actually is. See Apple TV review (2012).
It's fair to say that Apple TV is a little bit confusing to the uninitiated. The first thing to understand is that it's not, as its name would suggest, a TV made by Apple. It is actually Apple's own media streamer, and it's pretty much as simple as that.
What's a media streamer, you ask? It's a device that plugs into your TV or HD TV and allows you to watch films, movie trailers, TV shows, home videos, photos and other media from either computers or devices on your home network, or the internet. Unlike the first-generation Apple TV, the second- and third-generation (which both cost £99) have no internal hard disk, so they can only play content over your network. Take a look at Group test: what's the best TV?
The main difference from an Apple TV box to all other digital streamers/receivers, is that Apple TV is set up to work seamlessly with Apple products such as Macs and iOS devices like the iPhone or iPad. See also WD TV Live media streamer review.
What is Apple TV?
In 2008 Steve Jobs managed to explain what Apple TV is as succinctly as anyone has managed to date. He said "Apple TV was designed to be an accessory for iTunes and your computer. It was not what people wanted. We learned what people wanted was movies, movies, movies."
Of course, the box does more than just "movies, movies, movies”. While the Apple TV box can be used to play movies and video on your TV wirelessly over Wi-Fi, it can also play audio files (think your MP3 collection) and display photo slideshows on your television.
However, Apple TV is a little more complicated when you look into how it interacts with other Apple devices such as iPads, iPhones and iPod touches. Similarly Apple TV's limitations are equally confusing, as it will only work with certain video/audio formats. In short, the fact that the Apple TV box is geared up to work with other Apple devices is a bit of a double-edged sword.
It's good as Apple has made each of its AirPlay compatible devices ridiculously easy to use with Apple TV. AirPlay means you can stream media from your handheld device to the Apple TV box with a couple of easy clicks. For example, you could be part way through watching a movie on your iPhone 5 and then stream the rest of it onto your TV, via the Apple TV box, with a couple of taps of your iPhone's screen. Also, AirPlay can be used to display a game from your iPad, for example, on your TV, while using the iPad's screen for extra information, such as the track layout in a racing game.
The Apple TV box can also play movies/audio from iTunes on your computer. Simply turn on your Home Sharing in iTunes and providing Apple TV is connected to the same wireless network as your computer with iTunes is, then you can stream content in seconds.
The downside to Apple TV is that it only plays the formats that Apple likes, which isn't a problem if you buy all your content from Apple, as they will all work on Apple TV. However the chances of having all of your media in Apple approved formats are pretty slim, which makes the restrictions a bit of a pain for the non-Apple fanboy. The media formats that an Apple TV box can play are:
H.264 up to 720p at 30 frames per second (1st & 2nd generation)
H.264 up to 1080p at 30 frames per second (3rd generation)
MPEG-4 up to 720×432 (432p) or 640×480 pixels at 30 frame/s
Motion JPEG up to 720p at 30 frame/s
AAC (16–320 kbit/s)
FairPlay protected AAC
AC-3 Dolby Digital pass-through 
MP3 (16–320 kbit/s, with VBR)
What else does Apple TV do?
Like a lot of media streamers, Apple TV also gives you the ability to connect to the internet and watch content from a number of different providers. Unfortunately the list of providers that would appeal to an UK audience are a bit limited at the minute, with Netflix and YouTube being the only channels that really would really satisfy the average UK consumer. There's no BBC iPlayer or any other catch-up TV services, for example.
Nevertheless here is a list of all the Apple TV channels that are currently available: Netflix, Hulu Plus, YouTube, Flickr, iCloud, MLB.tv, NBA League Pass, NHL GameCenter.
For more information, see the description of Apple TV on Apple's website.