Steve Jobs announced that Apple TV will shortly receive a free software update that should expand the utility of the device.

Speaking during his Macworld Expo keynote speech, Apple CEO Steve Jobs revealed the new software, which enables Apple TV users to rent films from the iTunes Store directly to the device. Many of the new features will only be available to US users initially, however. The company also lowered the product's US price to $229 (£115).

Once a movie is rented, it begins downloading from the iTunes Store directly to Apple TV. Customers have up to 30 days to start watching it, and once a movie has been started customers have 24 hours to finish it - or watch it multiple times.

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Apple's iTunes Store will offer a catalogue of over 1,000 titles by the end of February, including over 100 titles in stunning high definition video with 5.1 Dolby Digital surround sound. DVD quality library titles cost $2.99 (£1.50) each to rent, while new releases cost $3.99 (£2). Where available, high definition versions of both library titles and new releases are set to cost one dollar more.

Apple TV also offers new features that should be of use to UK owners, including the capacity to view images from their computers, Flickr and .Mac Web Galleries. AppleTV can be set-up to subscribe to online galleries, then, whenever such a gallery is updated the images will be updated on the device.

Another improvement: Apple TV will let users browse the iTunes Store podcast directory, enabling users to subscribe to these transmissions. You can also explore YouTube and Apple's film preview selection - and - in a final flourish, it is now possible to buy songs directly from iTunes using Apple TV. Any purchased content will be synced with a computer running iTunes, for use on the computer, an iPod or iPhone.

Apple CEO Steve Jobs admitted to a change in the company's strategy for the device, observing that customers want a standalone device for their new media adventures on the TV screen. They don't want to be tied to the computer. What this means is that the Apple TV can now be considered a standalone solution for accessing such content - a computer isn't required. Naturally, the Apple TV will continue to sync with computers, but for the purposes of buying and exploring new content made available through iTunes, a computer isn't required.

The new Apple TV software will be made available as a free automatic download to all Apple TV customers later this month.