Chatter about the rejigged, hard drive-free and dirt cheap Apple TV has been rife ever since an insider spilled the beans last week. But the new set top box, set to be renamed iTV, is just a stepping stone for a full-on connected TV from Apple.

That’s what Piper Jaffray analyst Gene Munster reckons. Never shy of sharing his tuppence worth about Apple TV, Munster says a cloud-based iTunes TV package would set Apple up perfectly for a move into the ultra competitive TV market.

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"Apple's ability to deliver hardware, software and content that could replace an entire entertainment system with a single TV, puts Apple in a unique position for the emerging connected TV cycle," said Munster. “Apple already has several of the key ingredients for success in the connected TV market, many of which would differentiate Apple from current market players."

First though, Munster reckons Apple will move towards a monthly iTunes TV pass, locking punters into its ecosystem in the same way it has done successfully with the iPhone.

First though, we need a new set top box. And with the details all but nailed on, it seems the sleek new iTV will be sitting pretty in living rooms come the end of 2010.

Via AppleInsider