Engadget's got a tip from one of their sources that AT&T and Apple are working together to embed IPTV capabilities into the Apple TV by 2008. We're skeptical.
Apple TV? Not doing so hot. IPTV? Not doing so hot. Apple TV and IPTV together? What makes you think that this will be hot?
AppleTV's main purpose, in our view, is to get Apple's content from your computer into the living room. Whether it's iTunes music, iTunes movies, or iTunes TV shows, it seems like just an extension of Apple's ecosystem.
Now, with the recent addition of YouTube to Apple TV, it seems like Apple's making a bold step in working other content providers into the box. However, by adding IPTV to the mix, it would cannibalize Apple's own TV show section of their iTunes store, which doesn't quite make sense to us.