At a glance, appears to be—unlike most of the company's products—a failure. Years after its introduction, sales are minimal and its impact on the market is nearly impossible to detect. The price is down to a negligible $100 (it was $299 when it launched in 2006) and most people I talk to don't fully understand exactly what the product does. (No, you don't need a Mac to use it.) Yet, despite its slow start, Apple TV is still the company's best chance to dominate the living room.

Compared to the , the product is almost laughable. Apple CEO Tim Cook briefly at the D10 conference this week. "Last year we sold … 2.8 million Apple TVs," Cook said. "This year, just in the first six months of our year we've sold 2.7."

By contrast, Apple has sold more than 69 million iPads since they launched in 2010. For any company other than Apple, it would be time to spike the football.

Despite the fact that Apple TV sales are low, they are growing, and that's enough to keep Apple investing in a product that, in the past, has been While the iPad may be the reason Apple is the most valuable tech company in the world right now, Apple TV is how it can maintain that position.

The living room is wide open for digital disruption. Cable companies are losing their monopolistic grip on the content that gets shown on television. More than 3 million U.S. couch potatoes cancelled their cable subscriptions last year, . People are tired of paying for 500 "premium" channels they don't watch. For the same price, they can get a streaming package from Netflix, Hulu, or Amazon Prime and buy the top tier shows on iTunes. Apple already offers one of the best à la carte services on the market, so now all it needs is to partner with (or buy) a company for streaming. Apple Netflix, anyone?

Will Apple ever release its mythical iTV? Maybe. But it is really just a big monitor. Apple already makes monitors that can be used to watch video content. Making a bigger one—say 42 inches—and adding VESA-mounting brackets isn't revolutionary. It is just a big, dumb LCD. There are few reasons to put the processing power inside the TV, but there are lots of reasons not to.

Besides, making HDTVs is a terrible business right now. Truth is, the HDTV boom came and went. HDTV penetration in the U.S. is about 63 percent and many of those homes already have multiple sets. Even established HDTV vendors are having trouble making money. Pioneer and Hitachi left the market. Sony and Sharp are reporting losses in the HDTV divisions. When Sony's Kaz Hirai spelled out the three core product segments, . HDTVs didn't make the list.

In general, people only upgrade their HDTVs every six to eight years. Does that sounds like a business in which Apple should play? Especially when it can sell you a $99 box that will provide all the interactivity and content without the expense, risk, and overhead of making HDTVs?

Apple TV is revolutionary in a manner similar to the iPad. It took years to build momentum, it had to wait for broadband to become ubiquitous, for content deals to be struck, and for hardware prices to come down. It didn't create a new market overnight, like it did with the iPad, but the momentum is building. And after all, Apple doesn't need to create new customers for Apple TV. It simply needs to upsell the millions of current iTunes users who want to access their media libraries on their TVs.

Every Apple TV sold is at least another $10 per month of revenue from movies, TVs shows, and podcasts. Do a deal with HBO, and suddenly Apple TV is another platform for HBO GO. None of this requires making an actual HDTV, but it puts Apple in the living room anyway.

So no, Apple TV isn't the iPad, but it is far from a failure.