Apple TV becoming iTV, getting application support, yet losing full HD?

Engadget is following up on their previous story about an updated Apple TV set to hit the market as a $99 set top box, complete with iPhone 4 internals. Their new report details Apple’s supposed plans to rename the living room companion from Apple TV to iTV. It also sheds some more light on what everyone has rumored — iOS applications will, in some form, make an appearance on the device. Streaming iTunes services obviously look to be a lock, however, it’s not all downhill apparently. If Engadget’s sources are right, Apple’s newest set top box won’t be able to output full HD video. Not 1080p, not 1080i — just 720p. It’s inability is being blamed on the Apple A4 CPU, though the current iPhone 4 can handle that just fine. We’re looking at an announcement in “the Fall” though Apple’s September iPod event might be a nice occasion, don’t you think?

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Tags: 720p, A4, Apple, Apple TV, Apps, CPU, HD, iOS, iPhone 4, TV