Macworld preview: Major Apple TV upgrade due?

Apple has failed to meet analyst predictions that it would sell 1 million

Apple TVs

by the end of 2007. The company has reported that it sold only 400,000 or so of the devices through the third quarter of last year and will be unable to hit the analyst mark.

Despite Steve Jobs calling the product a 'hobby' and saying that he would give it an 18-month trial period, it looks like a major upgrade could be in the works. In fact, the Apple TV could see the most drastic upgrade of any Apple product at Macworld, according to numerous reports, with some speculating that it could be an important part of Apple's plan to offer movie rentals through iTunes.

New Apple TV relies on movie rentals

Whether or not Apple will indeed announce iTunes movie rentals at Macworld may prove to be the determining factor behind the company's decision to unveil a new Apple TV. If the company is not yet ready to announce rentals, there is little reason to unveil an upgrade. On the other hand, if Steve Jobs does announce the new service, the company will need a reliable set-top box to accompany it.

Regardless, all of these questions will be answered on Tuesday when Steve Jobs takes the stage at Macworld.