Apple last night revealed its second attempt to make a big dent in the HD video-on-demand market with the launch of a revamped Apple TV service.

Biggest difference is the price of the new hardware. The original sold at around $229 when it was launched in 2006 - the price for the new equipment is just $99 (around £64). However, reports suggest that the Apple TV box – which is just a quarter of the size of the original – is, in this instance, likely to hit parity with the dollar to sell for £99 in the UK.

Apple has also decided to follow a rental model rather than offering viewers the option to buy as in the original version.

It claimed that Apple TV users will be able to choose from the largest online selection of HD movies to rent, including first-run movies, with prices pitched at $4.99, and available on the same day they are released on DVD.

It also claimed to offer the largest online selection of HD TV show episodes from ABC, ABC Family, Fox, Disney Channel and BBC America for just 99 cents, although it stipulates these are only available in the USA.

The box, which is supplied with an Apple remote, will also allow users to stream music, videos and photos from PCs and Macs, effectively turning it into a home entertainment hub.

“This tiny, silent box costing just $99 lets users watch thousands of HD movies and TV shows, and makes all of their music, photos and videos effortlessly available on their home entertainment system,” said Apple chief executive Steve Jobs.