As you'd expect, the Apple TV 4K didn't have a problem choosing the right screen resolution for my set. But I was surprised to find that it automatically enabled HDR10 on my TV, as well. It turns out that the box keeps HDR enabled all the time to avoid unsightly switching from regular SDR (standard dynamic range) mode. With some TV sets, that process involves your screen going dark for around five seconds -- not exactly the smoothest consumer experience. It makes sense for Apple to keep HDR enabled, anyway, since the entire Apple TV interface is rendered to support the new formats. (Update: It turns out the Apple TV enables HDR10 at 60Hz on my TV, not Dolby Vision. But the Dolby Vision films I viewed definitely had HDR working properly.)

You'll find Apple's first batch of 4K HDR films in their own section on the iTunes store. So far, the selection includes some major new releases like Wonder Woman, Baby Driver and Alien Covenant. Notably, they're mostly selling for $20, with a few older titles going for $15. Walmart-owned Vudu, which has been selling and renting 4K films for years, currently has those titles for $30. Even the rental prices for 4K are lower on iTunes -- $6 versus $10 on Vudu. And, just as Apple promised, several films I previously purchased on iTunes -- Star Trek Beyond, The Lego Movie and Kingsman were automatically upgraded to 4K HDR.

When Apple announced its ambitious pricing model, I argued it would be huge for the 4K market. Now that I'm actually seeing it in action, it seems like only a matter of time until Vudu (which launched on the Apple TV last month) drops its prices to match. That's a win for all consumers, not just Apple fans.

So how do the 4K films actually look? Simply put: stunning. Kong: Skull Island started playing within a second, and it was sharp from the get-go, with no need for buffering. It's a film with plenty of explosions, gorgeous natural imagery and giant monsters, all of which made it the perfect 4K/Dolby Vision demo. When Kong stands in front of the bright tropical sun, I had to shield my eyes a bit -- it was almost as if I was looking at actual daylight. And since there are plenty of dusk and night scenes, the film really shows off HDR's ability to add more detail to darker scenes.

When Apple announced its ambitious pricing model, I argued it would be huge for the 4K market. It seems like only a matter of time until Vudu (which launched on the Apple TV last month) drops its prices to match. That's a win for all consumers, not just Apple fans.

The jungle setting and monster designs also give the added resolution a chance to shine -- at times I could make out individual hairs on Kong's face and blades of grass on the ground. I also checked out trailers for several films, including Baby Driver, Edge of Tomorrow and Kingsman, but it's unclear at this point if they're actually displaying in 4K/HDR. They look better than standard HD trailers, but we're waiting to hear back from Apple for confirmation. So far, the only third-party app that supports 4K is Netflix, but Apple says Amazon's upcoming Prime Video app will offer it as well. 4K is also coming to the YouTube app soon, and Apple is negotiating with Hulu to enable it eventually. (So far, Hulu only supports 4K on game consoles.)

As for games, I didn't have access to any new titles, but Transistor loaded up quickly and played more smoothly than it did on the last Apple TV. Honestly, Apple has squandered the box's gaming potential so far, but hopefully that'll change with this new version. The company has already nabbed a killer exclusive with Sky, an upcoming title from Journey creator Jenova Chen. I also saw Playdead's indie hit Inside running on the box, and it didn't look much different from the Xbox One version I've already played.

There are still potential downsides to Apple's new set-top box. Its support for surround sound audio tops out with Dolby 7.1 -- not the newer and more immersive Atmos format and DTS:X formats. And, at the moment, Apple isn't offering any iTunes TV shows in 4K. But those are both things that can change over time with some licensing deals and software updates.

Overall, the Apple TV 4K handled high-resolution films just as well as Vudu does natively on my TV. It's tough to tell how well it compares to 4K Blu-ray, which is currently the highest quality way to watch anything in your home. I'll dig deeper into that for our full review next week.