Apple's move to slash the price of one its Apple TV models and discontinue another lower capacity model have many scratching their heads. Monday morning the 40GB model of the Apple TV disappeared from U.S. retail locations and online. At the same time, the price of the 160GB version was slashed by one hundred dollars to $229 from $329.

Fulfillment of a prophecy?

In the days before Apple's September 9 media event, where the company unveiled new iPods and a revamped iTunes, many analysts believed the Apple TV was due for a refresh. Speculation revolved around the possibility that Apple TV could be overhauled, and earlier speculation wondered if the device might morph into a gaming machine.

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