Even Apple CEO Steve Jobs had to admit the coolest technology company on the planet has dropped the ball in one area of its vast, media/entertainment empire.

Apple TV.

At a presentation in San Francisco, he admitted the device, which allows users to watch video stored in iTunes on their TV set, has "never been a huge hit," confirming long buzzed-about rumors that Fox and ABC/Disney will allow their television shows to be rented for 99-cents through a new version of the device, which will not allow users to buy content.

Besides the 99-cent rental, the Apple TV device itself will be streamlined, shrunk to a quarter its current size and the price similarly downsized to $99. users will also be able to stream rented videos from Netflix through the same device.

What I'm wondering -- why would you rent TV shows for 99-cents if you, presumably, already have cable TV?

As more video resources migrate online, technology companies should be looking for that "killer app" that will converge the active use of the Internet with the passive experience of TV. More televisions themselves are popping up with websurfing capabilities, but companies such as Apple are uniquely positioned to offer a range of services accessible through a few button clicks.

Jobs also announced all of Apple's ipods will be revamped in the largest redesign of the product ever. Most will get slimmer or smaller, with a new $49 iPod Shuffle, a lighter ipod Nano with a multi-touch user interface and an iPod touch with front and rear facing camera, sharper display and video editing capabilities.

Read more about Jobs' revelations by clicking here.