Rumor has it that Apple has advised their authorized resellers to begin putting both the Apple Composite AV Cable and the Apple Component AV Cable on clearance. PhoneNews.com claims to have sources saying that Apple will be consolidating these cables soon.

The upcoming cable is known only as the “Apple AV Cable” and will function similar to the Xbox 360 Component AV Cable, that is, it will support both component and composite output through the same set of cables. One of the major complaints of the current cables is that you would have to purchase both the component and composite versions if you wanted to connect your iPod or iPhone to an HDTV and a SDTV (forcing you to spend nearly $100), this is precisely why I haven’t purchased either one of the cables yet.

PhoneNews.com also claims that the next generation iPhone will be capable of playing back HD video with 720p and 1080i output modes.

So far PhoneNews.com’s rumors all seem plausible but then they move into crazy Apple rumors territory by claiming that the next generation iPhone and iPod touch will be able to playback video from sources over the Wi-Fi network using Bonjour to find video content on other computers. They also claim that the iPhone and iPod touch will offer a 10 foot interface, similar to that of the Apple TV.

Personally I would love to 10 foot interface on an iPhone or iPod touch but I just don’t see it happening. Apple has had the opportunity to do this for so long and still hasn’t. since the 5th generation iPod users have been begging for a 10 foot interface, why would Apple do it now? The Apple TV does what those users want to be able to do and it is a fair price, if users are really interested in purchasing content through iTunes and watching it on their HDTV they will buy the Apple TV. The current functionality of the video output on iPods and iPhones is good enough and I don’t see Apple complicating things by adding a user interface that would be displayed through your TV.

Update 7/30/09: It has been over a month since the iPhone 3GS launch and not only does this new iPhone not support HD video, Apple also hasn’t consolidated their AV cable offerings.