It's certainly possible. A report comes in today from Engadget that Apple seems to finally be taking their Apple TV product seriously, soon to offer a cloud-based Apple TV with storage that would stream from the cloud" and start at just $99 with 16GB of storage (seems oddly small, compared to the current offerings). That is definitely priced to sell. Plus, the twist of fate for this is also the fact that the software might just be based off of iPhone OS 4.0. There will also be an option of a Time Capsule for users who still want that local storage instead of the cloud storage.

Currently, the Apple TV configuration is a price $229 with 160GB of on-board storage. It doesn't really come with much. I do have one myself and it's fun to use from time to time to rent movies, view photos, or go on YouTube from your big screen TV, but that's really it. It seems like Apple is finally changing that.

As for the release, it doesn't look like it will be at WWDC this year. WWDC seems to really focus on the iPhone this year and for developers attending, OS 4 and all of its "untapped potential". But a tipster says that work on this new version of the Apple TV is going "full steam ahead". I certainly hope there's some sort of upgrade option for those of us who spent $229 on a somewhat half-assed product.