You really don't seem to want this device to be made.
You argued against both the profitability and technical feasibility of this product. However, both of these factors is what drives industry in my opinion. each year technology gets better and cheaper.
Is there a market for this? Are you kidding? There are millions and millions of people who have perfectly good docking speakers that would definitely plunk down the appropriate amount of cash for airplay functionality. Neither of the current options Apple provides would be suited for this functionality.
You've got me all wrong, I'd love to see something like this made!
I'd also love to see Apple release an xMac or at least some "headless" Mac that uses 3.5" drives, but I am a realist and know that this is not (currently) the market they are targeting.
I'm just explaining why it's highly unlikely, from a purely business standpoint. Technically it's trivial. Remove the PSU and HDMI connector from the ATV2, and provide a new case. The teardown shows that there was already a spot for a dock connector on the ATV2 board.
Yes, Moore's law helps, but
volume helps even more. The iPhone, iPad, ATV2 all share major components, including the basic software that runs them. This partially what allows Apple to sell the ATV2 at $99. Answer me this specific question.
Is the market for this larger than either the ATV2 or the Airport Express?
If Apple made this, they are likely to annoy their partners who make docks (as they would stand to lose forward sales of Airplay enabled docks) and as no third party seems to have made a non-iPod/iPhone that can be plugged in to a dock so far it seems unlikely that this is quite as trivial as y'all think. (Why wouldn't all cheap Chinese MP3 players or even the Zune all use the dock connector if this was so easy?)
I haven't found many AirPlay docks on the market for less than US$300. What's the price delta between the AirPlay model and a similar non-AirPlay one? (And don't forget that the AirPlay one is probably leveraging some components that exist in the non-AirPlay one.)
B