The Apple TV has been neglected by Apple for a while now, with the release of the iPad the "hobby" vanished from the front page of Apple's online store but the details for the future of Apple TV look grand.
Engadget reports from two sources that the next Apple TV will be based on the next iPhone so will have an Apple A4 processor, 16GB of flash storage and be capable of outputting a 1080p full HD signal. The unit has been described to Engadget as small with just a power and video out ports and is said to resemble an "iPhone without a screen".
Sources also told Engadget that the unit will be priced at just $99 and will not announce anything about the product at the upcoming WWDC 2010.
The Apple TV will move to a primarily cloud sourced content system with a focus on streaming rather than mass storage although storage will be available via Time Capsule or presumably a computer.
Finally, Engadget notes that Apple TV will move away from its Mac OS X operating system to a version of iPhone OS but details of how this will work are unknown.