Vudu drops price to fend off resurgent Apple TV

Vudu is knocking 25 percent off the price of its eponymous video on demand box. Effective immediately, the Vudu is now $295, down from its original $399 asking price. Customers who've purchased the unit in the past 30 days can get a $100 movie credit by calling the company's customer service line (888-554-VUDU).

The price drop is a direct response to the newly resurgent Apple TV. When it was first introduced in September 2007, the Vudu box delivered several advantages versus the Apple: it offered PC free movie downloads with instant-on playback and good video quality, and included content from all major movie studios.

And in months since, Vudu had added TV shows as well as a limited slate of high def content as well. But the Apple TV is on track to match each of those bullet points when it gets a promised firmware upgrade next week, as outlined by Steve Jobs in his keynote address at last week's Macworld.

Adding to Vudu's uphill battle is the fact that Jobs also cut the price of Apple TV $229 for the 40GB version (down from $299) and $329 for the 160GB (previously $399) as well as the fact that the Apple product can access YouTube videos and stream photos and music to living room TVs from networked computers.

Ultimately, of course, Vudu's success or failure versus Apple TV will be judged in the consumer marketplace and if you're reading this, that means you. So which product would you prefer: the new Apple TV, or the Vudu?