Apple launches a smaller and more affordable version of Apple TV as it attempts to expand its entertainment empire into the living room. The new service connects to a high-definition TV and allows users to watch rented movies and TV shows from the company's own service. Apple TV also has additional features such as playing content from Netflix and Youtube and displaying photos on Flickr.

The new gadget, which costs $99, improves on the first television set-top box released by the company in 2007. Apple CEO Steve Jobs said that consumers were not ready for the first Apple TV, which needed to sync with a computer. The service also did not record live television shows unlike digital recorders such as TiVo.

"We've sold a lot of them, but it's never been a huge hit," said Jobs.

In addition to the Apple TV announcement, the company also unveiled new offering such as a social media feature for iTunes software, new software for devices such as the iPhone, iPod Touch and iPad and a new line of iPods.

The company's new TV box still does not have the capability to record television. However, the timing of the release may make a difference because customers are now used to watching shows online.

The device only allows users to rent content. Renting first-run HD movies on the day of its DVD release costs $4.99. Rentals of high-definition TV show will cost 99 cents.