App TV?

Piper Jaffray analyst Gene Munster may not have high expectations for Apple’s WWDC gathering in San Francisco Monday, but he does for the company’s Apple TV device. Big expectations. Munster believes Apple (AAPL) is working an update to the Apple TV — and an App Store to go along with it. While he admits to having no hard evidence of this, Munster notes that a move like this would make sense given the success of the iPhone as a gaming platform and the ease with which the iPhone and iPod touch could be transformed into a game controller.

“If Apple was planning on releasing an updated Apple TV in Sept. (which we are expecting), the company could use [WWDC] to launch an SDK for the Apple TV and announce an App Store for the platform,” Munster writes. “The Apps could include digital video services to expand the content available on the Apple TV (i.e Hulu), but perhaps more importantly, developers could begin developing games for the AppleTV. We believe Apple would likely develop an SDK that enabled the iPhone or iPod touch to be a controller or input device for games on the iPhone. This would enable users to control game features (like driving a car) with the tilt of the iPhone or iPod touch using the built-in accelerometer, but would not enable Wii-like motion sensing, for advanced features like swinging a golf club or aiming a weapon. To be clear, we do not expect this to be announced at WWDC’09 due to its relative complexity; rather, it could be a 2010 event, as the AppleTV and iPhone platforms develop.”

An intriguing idea and one that, frankly, makes perfect sense. In one fell swoop it would add much needed heft to the Apple TV, vastly extend Apple’s reach in the gaming market and extend the iPhone ecosystem into the living room. Why wouldn’t Apple do this?