Back in 2008 just after the iPhone had received its first major OS revision, I posited that Apple would update its Apple TV to use iPhone OS apps. Nothing of the sort has happened… yet.

But now, with Google TV having just been announced at Google I/O (where its Android platform powers the Apps, the set-top device and remote), there is a new rumor going ’round: the Apple TV will be reborn as a smaller, cheaper box running the iPhone OS, iPhone A4 processor, and cloud-hosted media. Makes sense to me, even two years ago.

With Google, Boxee, Roku, TiVo and many others ratcheting up the iTV fight, Apple will likely re-engage in this space. Their (sad for me) acquisition of Lala would seemingly be focused on how to incorporate the technology/people behind it’s cloud-based storage of media.

Apple already owns the mobile screen in the US (with iPod, iPad, and iPhone) and is doing well on the desktop/laptop screen ownership. Why not the last (and first) screen in nearly every household? Such a move would not only help its current reign, but also extend its gaming footprint into the world of Sony and Nintendo. It would appear to just be a matter of time now…