(All quotes in this post are either taken from Engadget’s excellent live-blogging coverage or the edited video published on the D: conference website).

“We’re in two businesses today, we’ll very shortly be in three, and a hobby”, Apple’s CEO Steve Jobs told Walt Mossberg in an on-stage interview at yesterday’s D: conference. The first two are computers and digital music (iPod/iTunes), and the third will be the cell phone market which Apple will enter next month with the launch of the iPhone. And the hobby? The company’s recently released set-top-box, the AppleTV.

“The reason I call it a hobby is a lot of people have tried and failed to make it a business. It’s a business that’s hundreds of thousands of units per year but it hasn’t crested to be millions of units per year, but I think if we improve things we can crack that.”

Later on in the Interview, Mossberg describes solving the problem of connecting the PC/Internet to the TV as a holy grail, and asked Jobs again why he referred to the AppleTV as a hobby. While admitting it was a purposely provocative statement, Jobs continued to play down the significance of the device, saying that for now we should think of it as the entree not the main course. “Coming from the PC market you first think about getting content from your PC to your living-room. I’m not sure that’s really what most consumers want”.

Jobs then went on to demonstrate the device’s new capability: watching YouTube videos streamed directly from the Internet. Perhaps a hint of what’s yet to come; the main course as it were. The company had lots of other ideas for the AppleTV, he said, including pulling in other content from the Internet. Although he all but ruled out adding a web browser to the device. “I think a normal web browser is not necessarily what people want in their living room”, he said.

In conceiving the AppleTV, Jobs said that for a long while the company wanted to produce a set-top-box, but didn’t want to have to deal with the Cable companies, and the different technical standards required to do so. It just didn’t make sense. Then he realized that there were a lot more DVD players in existence than traditional set-top-boxes.

“… we just want to be a new DVD player for the Internet age. And that’s what we can be. So our model for the Apple TV is like a DVD player for the Internet.”

We recently wrote about the plethora of unnoficial AppleTV hacks to have surfaced on the Internet, including a plug-in that brought YouTube access to Apple’s set-top-box. As of today that particular hacker can take a well earned rest (or move onto another cool project) because Apple will soon release an update which enables the device to browse, search, and playback YouTube content.

From the press release:

Beginning in mid-June, Apple TV will wirelessly stream videos directly from YouTube and play them on a user’s widescreen TV. Using Apple TV’s elegant interface and simple Apple Remote, viewers can easily browse, find and watch free videos from YouTube in the comfort of their living room.

Also of note is that users will be able to log-in to their YouTube accounts from the AppleTV so that they’ll be able to view and save their favorite videos.

YouTube support on the AppleTV is something that I’ve called for right from the start, and in many ways I’m not surprised to see Apple add this new feature. One of the reasons that the hackers have had so much joy developing unofficial add-ons is because the AppleTV’s software already has a plug-in architecture — suggesting that Apple always intended to roll out new functionality. (What upgrades do you think we’ll see next? Let us know in the comments.)

In more AppleTV-related news, Apple now offers a build-to-order version of its set-top-box with the option of a 160GB hard drive — priced at an extra $100 ($399). Nice!

In a recent post titled ‘When will Steve Jobs open up the AppleTV?‘, I looked at what the future may hold for Apple’s set-top-box, noting the progress being made by hackers who continue to add new functionality. Today, AwkwardTV reports on the release of an unofficial AppleTV development kit which should significantly speed up the time it takes for third-parties to create new plug-in applications for the device.

Written by Mac developer, Alan Quatermain, the kit includes a template for Apple’s Xcode development software, as well as an AppleTV ‘simulator’ for testing purposes.

YouTube’s embeddable flash video player is being given a makeover that adds improvements to its user interface, along with some additional functionality. The unofficial Google blog, Google Operating System, discovered some instances of the new player, and has published screen shots and further details.

New functionality includes the ability to skip forward to any point in the video, even before it’s finished loading (something inherited from Google Video). The new version of the player also improves the way it handles recommendations; hover your mouse over the video and a Mac OSX-like dock pops up, offering thumbnails of related videos.

Accessing the embed code has also become easier. Click on the menu button and you’re given two options: grab the embed code for the video or the URL of the YouTube page that displays the video.

With an ever greater amount of video being consumed online, many Internet users are in for a shock. There’s a dirty little secret in the broadband industry: Internet Service Providers (ISPs) don’t have the capacity to deliver the bandwidth that they claim to offer. One way ISPs attempt to conceal this problem is to place a cap of say 1GB per-month per user, something which is common in the UK for many of the lower-cost broadband packages on the market. Considering that a mere three hours viewing of Joost (the new online video service from the founders of Skype — see our review) would all but use up this monthly allowance, it’s clear that lots of Internet users aren’t invited to the party.

But what about those who (like me) pay more for ‘unlimited’ broadband access? There shouldn’t be a problem, right? Wrong.

AppleInsider caused a few ripples in the Mac blogosphere when they recently claimed that Cupertino will soon discontinue the Mac mini (Apple’s sub-$800 entry level Macintosh.). The reasoning is that Apple was never 100% behind the device, which, AppleInsider suggests, was only released to appease shareholder wishes.

Since then, the Mac mini has been treated to a rather mundane life-cycle. It has seen just four updates since inception, one of which was so insignificant in Apple’s own eyes that the company didn’t even bother to draft a press release.

However, one of those updates was a switch to an Intel processor, and perhaps more importantly, the addition of Apple’s Front Row software. For many Mac fans (including myself), this confirmed the device’s potential as a media center. When I bought my Intel-based Mac mini, I plugged it straight into my television, where it’s remained ever since.

Then along came the AppleTV…

Sony’s PS3 has joined the ranks of the AppleTV, XBox 360, and numerous media extenders from companies such as Linksys and Netgear, in trying to solve the “last 100 feet” problem. A new firmware update to Sony’s next generation game console adds media extender capabilities, so that content stored on a Vista compatible PC (or any DLNA-supported device, including Macs) can be streamed to the PS3.

According to the release, the update also enables:

• Upscaling of PlayStation / PlayStation 2 games and DVD movies up to a full 1080p when viewed on a compatible HDTV set.
• Access to PS3 stored media from a PSP via the Internet (not just a local WiFi network).
• Printing of digital photos stored on a PS3s hard drive or inserted storage media. Currently, select Epson printers connected via USB are compatible. In addition, users will find a new type of slideshow for displaying photos, zoom functionality and the option to crop images.

Pretty impressive stuff, especially accessing PS3 content from a PSP connected to the net. Welcome to the last100 Sony!

Just weeks before Apple launched it’s AppleTV (then known as the iTV), I wrote a post for ZDNet titled: Could YouTube be the killer-app for Apple’s iTV?. My proposition was that if Apple were to open up its set-top-box it wouldn’t be long before the device became capable of much more than streaming content from a Mac or PC.

The video blog, Wallstrip, which describes itself as “stock culture meets pop culture”, has been acquired by CBS. The price is unknown, but CBS has denied it’s 5 million dollars as was first reported by the gossip blog, Jossip. At the time is was suggested that the main attraction for CBS was securing the services of the shows dynamic host, Lindsay Campbell, who was to become the new face for the studios online video initiatives.

That’s not the case says NewTeeVee. The deal is just as much about the talent behind the camera:

Wallstrip creator Howard Lindzon said CBS bought the show in part because of its “web 2.0” attitude towards widely syndicating and distributing its video… “Quincy wants to be everywhere,” he said, meaning Quincy Smith, CBS’ dealmaker and the initiator of the Wallstrip purchase. The team will be part of CBSNews.com, helping out with its video projects.

In other words, the deal should be viewed as an acquisition of a production company, rather than a single show. CBS clearly hopes to leverage what the Wallstrip team have learnt from their online video experiments, as well as harness the team’s ability to put out very cost effective content, with a distribution model that embraces the distributed nature of the net.

On a personal note, I count myself as a fan of the show. I’m not really all that interested in the stock market, but Wallstrip does a good job of explaining the cultural phenomena behind market success stories (and in an entertaining way), such as how Apple positions itself as a lifestyle company, and why people go crazy over Nike.

Congrats Wallstrip!

(If you’re new to the show, check out the announcement episode.)