He bases part of that on Apple’s last conference call with the press and analysts, when Chief Financial Officer Tim Cook noted that the Apple TV saw triple digit growth in the recent quarter compared to the year-ago financial time period. He continued to call the device a hobby, but said Apple could continue to invest in it because the company felt it potentially had a big future.

Munster expects Apple to sell 6.6 million units this year, which could increase the company’s earnings-per-share up by more than 18 cents for the year. And in a note to clients he had this to say: "We expect Apple to design a connected television over the next two years (launching in 2011) with DVR functionality built in. These recorded shows could then sync with Macs, iPhones and iPods over a wireless network. The device would push Apple further into the digital living room with interactive TV, music, movie, and gaming features. With its iTunes ecosystem, Apple could develop a unique TV without any set-top-boxes or devices attached. With the use of a CableCARD for digital HD TV signal, Apple could effectively replace the home entertainment system (including a music stereo, cable box, Blu-ray/DVD player, and gaming console) with an all-in-one Apple television. Such a device would command a premium among a competitive field of budget TVs; we believe Apple could differentiate itself with software that makes home entertainment simple and solves a pain point for consumers (complicated TV and component systems)."

AppleInsider has more details on the report. Yours Truly also had an editorial about the Apple TV that was written before Munster's report came out. You can check out my thoughts tomorrow morning.

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