By Neil Hughes

Published: 08:00 AM EST (05:00 AM PST)

Though the Apple TV "hobby" is starting to take off, sales of the $99 set-top box just aren't enough to have a major effect on Apple's bottom line.

Reacting to Apple's announcement that the new Apple TV is expected to reach its one millionth sale this week, analyst Shaw Wu with Kaufman Bros. said in a note to investors on Wednesday that he views the figures as "positive, but fairly immaterial." If the device continues to sell a million units per quarter, it would amount to $400 million in annual revenue -- just a drop in the bucket for a company expected to earn $88 billion in revenue in its fiscal year 2011.

However, Wu said he believes the Apple TV is now positioned to become a "more material contributor and game changer in the TV space." But he believes a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV.

Wu estimates that about 40 percent of downloads from the App Store for the iPhone and iPad are games, and he believes that games could be a major selling point for the Apple TV.

"This capability isn't available today, but we believe it could be added fairly easily as Apple TV uses a similar A4 processor architecture as the iPhone, iPad and iPod touch," Wu said.

"One question many investors have asked us is how does Apple add multi-touch capability to a TV? Our answer is the ability to connect the Magic Trackpad, similar to adding multi-touch to its desktop Macs including iMac, Mac mini and Mac Pro. We also see the potential in other peripherals including game controllers."

He also added that many users want the device to be able to record TV programs for viewing later. He said the holdup is not a "technology issue," but is being held up because of "licensing terms."

Kaufman Bros. has maintained its "buy" rating for AAPL stock, and reaffirmed its price target of $395.