Apple has always claimed in their financial reports that Apple TV is a hobby. Well, $1B in sales seems to be a little bit more than an hobby. Priced @ $99 there is the sweet spot for a large swath of consumers to try it out. I have one, but rarely use it -- accept for when I want to use AirPlay with my iPad to through streaming video to the HDTV.
A new version of Apple TV is rumored to be announced this April and it is expected to have a new processor with higher performance and an upgraded UX. Apple is reportedly negotiating over a new agreement with Time Warner Cable which would be the first agreement with a cable or satellite provider.
Of course, this all leads to the long standing rumor of Apple coming out with their own HDTV. Could the amount of folks that own a Apple TV reach the tipping point that Apple feels they will have the "right formula" to launch such an effort?