But the bigger question remains—why would Apple sell a device on such a thin margin? I think the answer is two-fold. First, a $49 Apple TV would be an incredible, no-brainer accessory to devices running iOS 5. And though margins would be thin on the device itself I think it would help drive sales of iOS devices and propagate iOS platform lock-in. Second, I think the low price would give Apple momentum in the living room.

Nobody really knows what Apple has planned for Apple TV. A television set? Cheaper Apple TV? The same Apple TV we have now?

One thing is clear — Apple thinks the TV is a hobby, but it keeps dabbling in it. That must mean that it sees a future in there somewhere.

The Case for a $49 Apple TV | David Barnard