AppleInsider is supported by its audience and may earn commission as an Amazon Associate and affiliate partner on qualifying purchases. These affiliate partnerships do not influence our editorial content.
Shaw Wu of Kaufman Bros. issued a note to investors Wednesday in which he revealed that sources indicated the "biggest potential change" to the forthcoming Apple TV refresh is the move to an ARM architecture processor running the same iOS software that powers the iPhone, iPod touch and iPad. The current Apple TV hardware relies on an Intel x86-based chip, running a "light" version of Mac OS X and its Front Row software.
If the iPhone 4 and iPad are any indication, Apple is likely to employ its own custom A4 processor, or some variation of it. Apple began designing its own chips through the purchases of Intrinsity and PA Semi.
Wu also said that the new Apple TV, which some have said will be called the iTV, will have access to the App Store, Apple's digital software download storefront. Like the iPad, the new Apple TV could have access to the iPhone App Store, which offers about a quarter-million options for users, though such functionality is apparently not guaranteed.
"Our sources indicate there is some debate within Apple whether to allow this or not, or to have it run only Apple TV-specific apps," Wu said. "We believe the ability to run the same apps makes a lot of sense and believe this feature could be enough to drive significantly more volume for Apple TV. We find the potential to run video game apps on a TV set most intriguing, as it has been proven in the marketplace that there is (a) large market for casual gaming at inexpensive prices."
Wu did not indicate, however, how iPhone or iPad applications would run on a TV set, as those that rely on the touchscreen interface require users to interact with the images on screen. But games that rely on the accelerometer in Apple's mobile devices would likely be suited for the allegedly forthcoming set top box.
As for reports that Apple is negotiating with networks to offer 99 cent TV show rentals (reaffirmed this week by The New York Times), Wu said such an offering would benefit not only the Apple TV, but the company's entire ecosystem, including the iPhone, iPad, iPod touch and Mac lineup.
"From our checks with supply chain and industry sources, we believe potential changes could turn Apple TV into a bigger hobby and a multi-million unit seller," the analyst wrote. "And perhaps be a precursor to a bigger effort to address the home entertainment space down the road."