Now that Apple TV offers movie rentals in high definition, the question naturally arises: how does Apple’s HD stack up against, say, a Blu-ray disk or the HD content offered by the cable networks?

To get at an answer, the folks at iLounge have done a favor for the rest of us (who don’t necessarily have an Apple TV, a Blu-ray player or even an HD TV): they’ve posted side-by-side comparisons of the latest Bruce Willis vehicle, “Live Free or Die Hard”, viewed on four systems.

• Blu-ray
• Apple TV
• HD video on demand
• Standard DVD

If you’re in the market for an Apple (AAPL) TV set top box, you owe it to yourself to read Charles Starrett’s full review. But here’s the money quote:

While the Blu-Ray version was the clear winner of the bunch, we were surprised by how well the Apple TV fared in comparison to the other formats we tested. Its weakest performance was in the straight shot-for-shot resolution test, where we looked at how all four devices displayed a scene with fine details. (link)

That said, Starrett points out that resolution numbers don’t necessarily mean as much as compression, color, motion, aspect ratio, download time and price. His conclusion:

From where we stand, frequent and quality-sensitive video watchers will find Netflix or Blockbuster to be better month-to-month values for HD video rentals than Apple TV or on-demand cable services, while Apple TV provides an option that’s in the upper middle of the pack on quality and the best on convenience, so long as you’re willing to pay the $229-$329 cost of entry. The question is: are you?

Photos reprinted by kind permission of iLounge.com. For lots more images, available full size, see here.

With less than two weeks to go before Steve Jobs’ Jan. 15 keynote, analyst Shaw Wu of American Technology Research offers his best guess for what Apple’s (AAPL) CEO might have up his sleeve at Macworld Expo 2008. In a note to clients issued this morning, Wu predicts:

• Blu-ray. Citing unnamed sources, Wu says that Apple will outline an HD strategy that backs Sony’s Blu-ray format over the HD-DVD standard favored by Microsoft. (Although Wu hedges his bets and suggests that Apple might also use a combo Blu-ray/HD-DVD drive.)
• Subnotebook. Wu says Apple will re-enter the subnotebook space (nothing new there) but adds that Jobs may call the new machine the MacBook mini or MacBook slim. Any preferences?
• Movie rentals. Wu points out that the digital movie rental deals expected to be announced at Macworld are a departure driven by necessity, and represent a new business model for Apple. “Whether these movies expire based on time and/or usage is unclear to us,” he writes, “But we do believe that rentals are a significant change in its philosophy.”
• Speed bumps and external HDD: In the category of smaller announcements, Wu is picking up potential news related to speed bumps and or capacity bumps in current Macs and iPhones, and an external HDD storage/dock/streaming device for the Airport Extreme and the new MacBook mini/slim.
• Apple TV. Wu sees two big shortcomings in the current product: 1. no way to connect directly to the Internet for TV and movie content and 2. lack of a TV tuner. “Our sources indicate that AAPL is working on fixing these weaknesses to make Apple TV a much stronger product,” he writes, later in 2008 or perhaps 2009, but not at Macworld 2008.
• 3G iPhone. Coming mid to second-half 2008 at a higher price point, Wu says, allowing Apple to reposition the current iPhone as a “more mainstream” product.