Apple should create a Apple TV Nano that is a low-cost, no hard drive, streaming alternative to Apple TV.

I think that Apple should make a new product that sits below Apple TV in Apple's product line-up, the Apple TV Nano.

Basically the TV Nano would be a smaller, more compact version on the Apple TV, runs the exact same software and UI, with all the features of the normal Apple TV, but doesn't have a hard drive. You would use the TV Nano to stream content from your Mac or PC for playback on your HDTV. Because of the lack of a HDD, the TV Nano would be priced around £70 - £100, so that you could afford to buy one for each TV in your home.

If the Apple TV OS was upgraded to be able to playback content from Internet catch-up services like Hulu in the US and iPlayer in the UK, I believe a device like this could become the de facto media streaming / IPTV product in the market.