The next-generation Apple TV will be capped at 720p for video output and will be capable of running apps, according to a new report. Without citing sources, Engadget reports that the new device won’t be enabled to handle 1080i or 1080p video, supposedly because the A4 chip can’t handle higher-resolution content — although the report states there is much internal debate going on at Apple concerning this issue. In addition, Engadget claims that the device will be capable of running apps, but it is unclear in what form they would arrive given that the Apple TV lacks a touchscreen interface and other hardware necessary to run certain iPhone, iPod touch, and iPad applications. Finally, the report claims that the next Apple TV will be renamed “iTV,” which was the product’s name when it was first shown in September 2006; it is believed that the name was scrapped in part due to Elgato’s EyeTV products for Mac.

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