Steve Jobs has admitted that the company failed first time around with its Apple TV product.

Launching what the Apple CEO called, "Apple TV take two", the company has upgraded the capabilities of the devices to allow users to rent movies via the internet, download DVD and HD quality footage.

Jobs said: "I think we've made some progress since our first try".

The new interface which will be available as a software update in 2 weeks will be available to all current Apple TV owners however it looks unlikely to be coming to the UK anytime soon.

The company has also announced that it will be reducing the price of the device to $229.

Users of the new device will be able to steam content directly from a .mac account be it video or video as well as stream live flickr accounts from people that you don't even know. However during a live demo, the feature failed to work.

The new device will also support podcasts and Dolby Digital 5.1 surround sound.

Ditching the previous interface, and offering a fresh UI, the new offering will centre around the "movie rental experience" according to Steve Jobs.

Users will be able to access content from all the major Hollywood studios who have all signed up to the company's new offering.

The move pitches Apple directly against Microsoft's Video marketplace on the Xbox 360.