Engadget has received info from a trusted source that the next Apple TV will be renamed iTV, have apps, and unfortunately, not support 1080p playback.

Apparently the box won't be capable of handling (or enabled to handle) 1080i or 1080p video. Instead it will only push out 720p clips. The word -- and cause for much internal debate, we're told -- is that this has something to do with the A4's inability to crank on higher resolution content, but we don't see how that's possible considering the iPhone 3GS could play back full HD video. Furthermore, the device will be getting apps and presumably an App Store entry, though it's unclear if there will be cross-pollination between iPad and iPhone / iPod touch offerings and new Apple TV applications.

Interestingly, the switch to the name iTV is actually what Apple had originally called the Apple TV and it makes sense to go back, especially since it looks like it will be similar to iOS with apps.

So what do you think about the lack of 1080p support? I find this extremely disappointing and can't imagine Apple releasing such a subpar product. However, at only a $99 price point, I may be able to forgive Apple for this one. How about you?