Our friends at Engadget have heard from a trusted source that Apple is indeed remaking the Apple TV, as was previously guessed based on its past trajectory. But the final product may surprise you: it won't have 1080p output, according to Engadget (which refutes earlier rumors), but it will keep that US$99 price, and bring apps from the App Store to the table.
It's not yet known whether it will simply use iPhone or iPad apps (or get a brand new entry of its own), but Engadget says some connection to both the App Store and streaming services is going to happen. Internally, the box is supposed to be comparable to the hardware found in an iPhone 4, including one of Apple's own A4 chips running the show.
And with all of these other changes, the device is reportedly getting a new name, the iTV. That makes a lot of sense, actually -- not only does it distinguish this new unit from the "AppleTV" hobby, but it brings the device in line with the iPhone, iPad, and Apple's other iOS devices. Engadget also notes that the iTV isn't a new name so much as it is a return to the old one, so if all of this turns out to be true, it would seem like Apple has a much more directed strategy for its set-top box this time around.
Engadget says we'll see all revealed by sometime this Fall. It all sounds very interesting -- if Apple can squeeze all of that into a box that costs only $99, who wouldn't plug that into their television?
Note: Over at The Loop, Peter Cohen points out that the existing Apple TV is a 720p-native device, so the hypothetical 1080p support that this hypothetical future iTV might or might not have sported... well, it's all hypothetical until the hardware hits the Apple Store.