Edible Apple

The Apple TV may currently be a hobby in Apple’s eyes, but Steve Jobs and co. are reportedly looking to upgrade the device in a major way. A few weeks back, a little birdie told Engadget that the next iteration of Apple TV will not only come in a smaller iPhone-like form factor, but that it will finally include support for 1080p HD video and will come equipped with an A4 processor and 16GB of flash storage. And on top of that, Apple is reportedly planning to slash the price of the device down to $99, making it more affordable than ever.

But hardware is only part of the Apple TV story. Newteevee is reporting that Apple is looking to rollout a new rental service whereby users can download individual episodes of TV shows for only $0.99. The current pricing structure allows consumers to purchase individual TV episodes for $1.99, or $2.99 if they want to get their fix in HD.

The report indicates that the rumored rental initiative from Apple would be set up exactly like iTunes movie rentals whereby users will have 30 days to start watching rented content and a 24 hour viewing window once they hit play.

Unlike its current TV and movie sales through iTunes, the new service will move content into the cloud and stream it to users, rather than having them download videos. By doing so, Apple will merely be following a broader industry trend. After all, almost all web video providers today — including industry heavyweights like YouTube, Netflix, and Hulu — use streaming technologies rather than downloads for video delivery.

It remains, unclear, though, if $0.99 shows from Apple will be restricted to Apple TV owners or if it will be made available to anyone running iTunes.