At the Macworld Expo in San Francisco, Apple announced that its iTunes service will include movie rentals in addition to downloads, while its Apple TV product will no longer require the use of a computer. Steve Jobs conceded that the initial efforts of his company with Apple TV had been a disappointment.

Every company has tried to figure out how to get movies over the internet to a widescreen television, he said, and “all have missed.” He admitted that Apple tried with the Apple TV, designed to be an accessory for iTunes and the computer, but that was not what people wanted. They really wanted movies, so Apple TV is back with Take 2.

Users of iTunes will now be able to rent library movie titles for $2.99 or new releases for $3.99. High-definition rentals will be available for $3.99 and $4.99.

Apple TV will no longer require the use of a personal computer. While it can still be networked with a computer, it will now connect directly to the internet and enable movies to be discovered, downloaded and displayed without the need for a personal computer proxy.

Existing Apple TV owners will be able to download a free software update. The new purchase price will be reduced from $299 to $229, although it seems that this will not be passed on to prospective customers in Europe.

“It’s important to make the Internet-to-TV device chain as simple as possible and removing the PC from the equation certainly succeeds in accomplishing this objective,” noted Michael Greeson, president and principal analyst for informitv partners The Diffusion Group.

“Simplifying the on-TV discovery and purchase process, however, is just as important. Apple has a lot of work to do to in this department, especially when compared to new services such as Vudu.”

“Apple’s end game is to establish a proprietary foothold on the living room TV and only way to make this happen is to offer services which compete directly with incumbent PayTV video-on-demand and pay-per-view services, models which rent movies on subsidised set-top boxes.”

The Diffusion Group says it still begs the question as to why a consumer would wish to pay for a device that simply replicates an existing experience. It suggests that Apple needs to deliver a living room experience that transcends what incumbents provide. Furthermore, it says Apple needs to eliminate the upfront cost of the box. “Only then will this kind of service reach more than the early adopters and Apple fanatics, at least in today’s marketplace.”

The BBC is apparently considering extending its iPlayer offering to the Apple TV. It would also be a candidate for the Kangaroo collaboration with ITV and Channel 4.

The Apple TV user interface is characteristically in a class of its own and has been significantly revamped. The main criticism has been with the lack of compelling programming. If Apple can address this through appropriate partnerships, it could still become the television equivalent of the iPod.