I like to keep an eye on the Apple rumour and gossip sites to see what new technology I will be lusting after in a few months. The current favourite product that doesn't exist yet but is being designed by rumour is an Apple iTV. Like all things Apple, if it's on a website and someone has a "reliable" source who says the new product "will have feature X,Y and Z" you can be reasonably certain that is is either all made up or a proof of concept device that wont actually make it to development so the security teams stopped watching it.
First content will need to be addressed. The current Apple TV is useful for renting movies or streaming content from my MacBook or iPad but I cant get TV on it in Ireland. If Apple enter the TV market in a strong way they are going to have to improve the content that is available outside the States. Apple could sign a deal with the studios to provide world wide access to their shows and the back catalogues at a reasonable price for the viewer then they would be onto a winner. Next they are still going to have to make it possible for the local channels to get content onto the box. For example, I may not watch RTE much but I'll still want to watch the news and special shows like the Late Late Toy Show live and not on an RTE Player type service.
Second, how that content is managed will also need to be looked at. My broadband like many others is not the fastest so movies take a while to download, even for streaming. The user will need to have the ability to store some shows locally either downloaded or "recorded" in advance and can be viewed on demand. The Internet is great but Internet providers are not. You don't need to be able to store 100 hours of The West Wing for those days when you are bored but you do need to be able to press a button and watch tonight's episode of The Walking Dead when you get home late. Waiting for a download to complete or the stream to buffer is going to ruin the experience.
How its controlled is a more fun but potentially more annoying issue. Voice recognition with Siri is not going to work on its own, especially when you want to browse randomly through the channels. Try sitting in front of the TV tonight browsing channels and every time you press channel up say "Channel Up". You'll get pissed off very quickly, though not as quickly as the other people in the room with you. The existing Apple Remote is quite nice and simple but it is difficult to type in anything. A combination of the two would work but the more interesting controller would be a Kinect type motion sensor. Waving your hand left or right in a page turning motion to spin through a coverflow of channels and shows. If you have an iOS device look at the coverflow of music and imagine if each cover was showing a live feed of a TV channel. Then there could be a press type motion to select the channel. If the volume is too loud just gesture down with your hand as if you were telling a friend to lower their voice. Other motions would need more work, off/mute/pause but perhaps that's where Siri would come in.
(Update: I wrote most of this post last night and then this afternoon I saw this patent application from Apple)
If Apple produced that devcice similar to the existing Apple TV 2 hockey puck, with a microphone, video/movement sensor and access to a huge online library of shows I'd buy it in a heart beat. That way Apple could deliver a new TV experience to a mass market without having to produce the TVs themselves.