Late May is always Apple rumor time. What we know is that Apple will turn WWDC on June 7 into the “center of the app universe.” We know there will be a new iPhone, we even know how it will look like, and we know that there will be something else that won’t leave us “disappointed”. That is what Steve Jobs supposedly wrote in an email. According to Engadget, this “something else” may be a new version of the odd Apple TV device, which apparently will morph into another set-top box. We are sure there may have been reasons why this new Apple TV may be a new standalone device. But isn’t it time for Apple to build its own integrated TV? A TV that connects the iPod, iPhone, iPad and any Mac you may have in your household? If that is the case, then it is the A4 CPU that ties everything together and Apple goes after an entirely new target: Sony.

When you read about the rumored features of Apple’s new Apple TV device – we are assuming that Engadget’s information is correct – you might be scratching your head. The new Apple TV could be based on iPad technology (A4 processor) with 16 GB of memory, which will represent a network streaming appliance that is likely, given its small storage capacity, to rely heavily on Apple’s MobileMe cloud platform. The new Apple TV is said to run 1080p video and should easily connect to a wide range of iTunes entertainment services such as video, music, radio and various Internet content types, including applications from the AppStore.

Apple TV has never had the punch of other Apple products. In fact, it is quite stunning it has survived until today. It was first released in March 2007 with 40 GB storage and was upgraded a few months later to 160 GB. The most recent upgrade came with OS version 3 in October of last year, with support for widescreen HD video (1280x720p) and Internet radio. However, it remained a mostly invisible media streaming box that has lived in the shadow of the iPod, iPhone and Mac. But, quite apparently, Apple sees enough market potential to update the device and give it another shot.

What, if you were Steve Jobs, and you were given the opportunity to re-imagine Apple TV, what would you come up with? What is your idea, if we know that Apple’s biggest successes are based on the idea to improve on the mistakes others have made? Would you build another streaming box that sits next to or below a TV?

Maybe. We already have enough boxes. There is no need for another box that wastes space next to your Wii, Xbox, Playstation, a cable or satellite TV box and possibly a surround sound system. Well, with one exception, perhaps.

Scenario 1: Apple TV is not really Apple TV. It is a streaming-media, pizza-baking, game console.

Apple never claimed that Apple TV was one of its core products. It was often described as a hobby and ended up with an uncertain future. The only ties it has to any other Apple product – and we know that Apple products breathe by being connected to the platform ecosystem – was iTunes. But it never worked as well as, for example, the iPhone does.

What makes Apple TV a truly remarkable failure so far is the fact that Apple has been trying to figure out what its digital media hub could be. Back in 1999, for example, Steve Jobs was convinced the iMac would be that hub in our imaginary digital home. One decade later, it is clear that the desktop PC is dying, our world is going mobile and our TVs are getting smarter, with networked application TVs waiting right around the corner. TVs will become a platform game and if Apple is all about being a platform consisting of a solid operating system and a much more closed hardware system that is tailored to running its software and applications, then Apple TV’s time is yet to arrive.

Apple’s opportunity is in expanding Apple TV’s reach from a basic streaming media box to a universal entertainment device that integrates the company’s mobile devices, including iPods, iPhones, iPads and mobile computers. Conceivably, Apple TV could become a digital media hub that (1) streams entertainment content from iTunes and services such as YouTube, (2) will be able to install AppStore applications that run on your TV, and (3) will tightly integrate with MobileMe to access a variety of content types (documents, images, bookmarks) you store online. Imagine content that could be created on your Mac, iPhone, iPod, and iPad that will be instantly accessible across those platforms and tied together by Apple TV.

At least one analyst suggested last year that Apple will be rolling out a game console by 2013, which in fact may also be related to Apple TV. There are plenty of games available through the AppStore, which could run on your TV if the new Apple TV will run the iPhone OS and if it is based on the A4 processor. Down the road, Apple may be offering its own gaming service with content running through the cloud, which means that a relatively weak hardware platform based on the A4 chip is all you really need. Of course, if you think a bit further into the future, Apple may be looking much more into family room entertainment than it has so far. Think about a much stronger gaming focus and a cloud distributing platform that could look like Valve’s Steam service. I recently noted in a column for Tom’s Hardware that Apple could be acquiring Valve at some point, which would spark considerable outrage, but it could catapult Apple deep into the gaming community as well, if Steve Jobs uses his charm, unique vocabulary and sales talent.

It is not too difficult to imagine that Apple TV, perhaps with a new name, could become the universal media hub Apple has been looking for more than 10 years. And if Apple figures out a way to build a pizza oven into it, we are quite sure it will do that as well. You get the point: Combining all features Apple currently offers across its mobile platforms will be key to the success of a new Apple TV.

Read on the next page: Apple TV as a TV. Apple goes after Sony and Google.

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