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Over on TVPredictions.com, proprietor Phil Swann asserts that Apple’s (AAPL) new AppleTV set-top box is going to bomb.

His four-part case (a condensed version):

1. Limited Use: AppleTV cannot receive or record cable or satellite signals; and it is not a DVR.
2. Set-Top Fatigue: People have too many set-top boxes already, with a DVD player, cable or satellite box and possibly a TiVo, video game console and audio/video receiver. “Americans have set-top fatigue,” he says.
3. Compatibility & Confusion: The device won’t work with older analog TVs. Also, it is “too confusing for most Americans… Despite what some might think, this is not a tech-savvy nation.”
4. Inconvenient: If you want to watch a music video from iTunes, you have to buy it, download it, then move it to your AppleTV before it reaches your TV.

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His conclusion:

Although the tech-intelligentsia will slobber over AppleTV and call it the Second Coming, AppleTV will fail to reach beyond the cultish Mac audience, probably topping off at about three million homes.

That would still be a $900 million market, I would point out. But that would be a lot smaller than some people are hoping.

Apple yesterday was up $2.35 at $93.83.

Source: Four Reasons Why The AppleTV Might Bomb