The next major Apple product should be a universal entertainment device for the living room.

Apple already has 30 inch cinema displays that can be used as de facto televisions, but they are not priced for this market. They also have Apple TV with access to iTunes for music and movie downloads.

Apple-TV-2

Apple TV version 2 should transform into a 30 or 40 inch cinema display with built in 160GB hard disk and WiFi for access to iTunes.

This device could include a CD/DVD drive in the side, like on the iMac. Although Apple may prefer to encourage the purchasing of digital music and movies through iTunes.

Apple could also extend the Apps Store to this new device, which would no doubt be very profitable as it has been for the iPhone.