New Apple TV in the works, based on iPhone OS and priced at $99?

Engadget reported today that Apple is working on a next-generation Apple TV that will be based on iPhone OS, will be built for streaming (either from the cloud or an in-home Time Capsule), and will support 1080P HD output. But, the biggest news (if it's true) is that Apple plans to sell its next-generation device for $99. That's virtually an impulse buy, and they're likely to fly out of Apple's stores.

There's no word on whether this device will be compatible with off-the-shelf iPhone apps, and it's very unlikely that it will be announced at the Worldwide Developers Conference on June 7th, but my guess is that (again, if any of this is true) Apple plans to have this out in time for the 2010 Christmas Season, thus thorougly bolloxing up the launch of Google TV. Why? Given the fact that Google TV is based on Intel's Atom architecture, it's very unlikely that Logitech's standalone set-top box is going to come to market for less than $200, and it'll probably be closer to $300.

The big issue for Apple TV is whether Apple will allow access to any web video service, as Google is striving to do, or whether it will be locked down to the iTunes Store, as the current iteration of Apple TV is. If the new Apple TV is still locked down, Google TV will provide a competitive alternative, although not an attractive alternative given its (probable) price.