Apple is now jostling with PetroChina Co to be the world's second-most-valuable company. So what will it take to get to No 1?

There are as many answers to that question as there are analysts following Apple shares. And there's still a chasm between Apple's valuation of about $260 billion (Dh954.2 billion) and No 1 Exxon Mobil's $315 billion.

One key is to sell lots more iPhones, iPads and other mobile devices. Non-Mac products generated two-thirds of Apple's revenue last year; a decade ago, that figure was roughly zero. And mobile devices have a lot more room to grow: Even in the US, smartphones won't outnumber basic cell phones until sometime late next year, according to Nielsen research.

For Apple to maintain its momentum, though, it has to find a new world to conquer. And if I'm involved in any part of the television business, from manufacturing sets to providing programming, right now I'm getting very, very nervous. Sooner or later, Chief Executive Officer Steve Jobs is going to have to mount a full-scale assault on the living room. And if history is any guide, established players beware.

Apple is, of course, notoriously closed-mouthed about its future plans, and generally pooh-poohs speculation about its television ambitions. While it has been nibbling around the edges for four years with a device called Apple TV — and released a new version of it this week — Jobs continues to refer to it in public as a "hobby" that isn't central to Apple's strategy.

Sounds familiar

No one, including Apple, expects the new Apple TV to sweep away those other players. Still, the latest version offers some tantalizing hints about what may be ahead.

The new device retains the name but almost nothing else from its predecessor. The previous one was, in essence, a $229 special-purpose computer that attached to your TV and included an internal hard drive for storing content acquired through Apple's iTunes Store. This one costs only $99, has no hard disk and is a quarter the size. It fits in the palm of your hand and is all but invisible next to the typical flat-panel television.

The new Apple TV is built around its ability to stream high-definition content wirelessly over your home Wi-Fi network, whether it's rented movies and television shows from iTunes and Netflix that you can order straight from your television, purchased movies, music and photos that you store on your computer, or free online content from sources like YouTube and Pandora.

In its approach and simplicity, the Apple TV most resembles the Roku Player, which started life as a way to stream Netflix movies but now provides access to sources that include Amazon.com, Major League Baseball and the Hulu Plus TV service. But the Roku, while a fine device, hasn't revolutionised the market. If that's all Apple brings to the table, it won't either, even if its product does sport a typically Apple-quality user interface and experience.

For the moment, at least, Apple TV even has fewer sources of content than Roku; the only TV networks making current programmes available for it so far are News Corp.'s Fox network and ABC, which is owned by Walt Disney Co., whose largest shareholder is Steve Jobs.

But slick things are going on behind the scenes with this device. One is called AirPlay, which after a software update next month will allow for seamless, wireless streaming of video from an iPad, iPhone or iPod Touch. That will make it possible to begin a movie on a mobile device - on the train, say - then walk into your home and have it appear magically on the big screen in the den.

Explosion of apps

Another is the fact that the Apple TV now runs the same operating system, which the company calls iOS, as the mobile devices. Unlike them, the Apple TV doesn't run applications written by third-party developers — now. Then again, the iPhone didn't either, when it was introduced. When Apple opened it up a few months later, it triggered an explosion of apps — now 200,000 and counting — that in turn fuelled the sales that have propelled Apple up that list of most-valuable companies.

The new Apple TV may turn out to be a Trojan Horse — a deceptively simple gadget that, once in the home, expands its functionality and reach until it takes control of everything. Or it may prove to be the precursor of some bigger, more elaborate foray — perhaps even an effort to build the long-speculated-upon Apple television set.

Whatever the answer is, Apple TV is no longer a hobby. It's now the opening salvo in the coming living-room war.