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Hard to say. I think Apple said they sold 3 million of them last year which would make it very successful within the tiny dedicated IPTV set top market. It's not really a finished product yet. The current Apple TV is like the Motorola Rockr. A hint of things to come but definitely not ready to make a big splash. It's interesting to note though that NetFlix says they stream more video to Apple TVs than iPads. So something is definitely starting to happen here but I think we're still a couple of years away from the Apple TV really being a mass market device.

I find it interesting because for all of the hype about Apple's mindshare and marketing prowess a quickly expanding market exists where Apple is a niche player. Internet enabled TV's and boxes are ubiquitous and very popular yet Apple can't make a significant dent in that market despite being an early pioneer.

Apple always said it's a hobby. Not sure wether that's just rhetoric. At any case, Apple TV has been steadily improving and is selling more and more.