Apple to release $99 Apple TV to trump Google TV?

Rumors are circulating that Apple will soon release a 1080p Apple TV running iPhone OS 4 for just $99. Though Apple was long at work on this upgrade before the announcement of Google TV, the two devices are similar in that they both run on mobile operating systems (Google TV will run on Android). More important than the pricing or OS of the rumored Apple TV refresh, however, is what this could mean for Apple's strategy of selling and distributing content.

In order to get the price down to $99, the rumored device sports only 16GB of memory. If it does indeed allow for 1080p streaming, 16GB is not enough memory to store more than a couple of movies. Together with Apple's purchase of the streaming music service Lala -- and their probable launch of iTunes.com -- does this mark a sea change in Apple's media sales strategy, a change in which they now want customers to store content in the cloud instead of on devices?

In many ways this would make sense, as one of the ways my Android phone is clearly superior to iPhones is through its synching with the cloud. Emails, contacts, calendar events, applications -- there is no need to plug an Android phone into your computer except to transfer music (which Android phones handle far less elegantly than iPhones). As it is, plugging in and syncing devices doesn't feel particularly "magical and revolutionary," to use Apple's parlance. But would 3G networks really support music and movie streaming? In the case of the former, yes -- the mobile applications for Pandora, Slacker Radio, and Rhapsody come to mind -- but movies are another beast entirely when it comes to bandwidth. Furthermore, the question is less, "could Apple does this?" and more "why would Apple do this?"

The only reason Apple would do this is to make more money. Market research would have to show that iTunes purchases would rise significantly if purchased files were available anytime, anywhere (provided one has an Apple device and a cell signal). Customer surveys would have to tell the world's most valuable tech company that its consumers were somewhat dissatisfied with the current system. Perhaps they could move to a pay-per-play instead of the current download-to-own model (or even a subscription service, ala Netflix). Regardless of how this shakes out, though, I doubt very much that Apple will be removing the obstacles to getting content into iTunes, so as far as filmmakers and independent content creators are concerned, my hopes are still pinned on Google TV.

Link: AppleInsider | New cloud-centric Apple TV to cost $99, run on iPhone OS 4?