Those Apple TV LCD rumors with everything posted today are looking more feasible..wouldn't put it past them to bring the ultimate TV/Internet device.
If anyone can do it, Apple can.
This is such a tricky one. How does Apple succeed in the low margin TV market? Consumers may be willing to pay a few hundred dollars more for a 'premium' mobile device, but what sort of additional cost would we be looking at for a premium internet TV product?
I think Apple could do it, but it would be hard.
Having said that, if they nail this one early on, it WILL be the next coup for Apple to pull off (similar to their success in mobile devices), internet TV is certainly the way of the future for home based video content consumption. A fully integrated internet TV system running on a hybrid OS (Lion/iOS 5) would be awesome and has been on my dream ideas list for about a while now.