A little over a week after Google announced Google TV at I/O, Engadget has received word of an upcoming Apple TV update.

I’m still looking into Google TV, but I just haven’t found anything compelling about it. The biggest drawback in my opinion is its use of IR blasters to control other components in your home theater set up. I really don’t think it’s going to be successful in its current form. It’s really hard to get people to buy another box, especially when it doesn’t replace anything in your set up and simply adds functionality to existing components.

The Apple TV update, on the other hand, sounds amazing. Especially if it is paired with the rumored TV subscriptions that was the talk of the town late last year.

According to Engadget’s sources, the new Apple TV will be much closer to the iPhone and iPad in terms of OS and hardware than to Macs. The device will have an A4 processor, 16GB of storage, and will be capable of 1080p video playback. Because of the limited storage Apple will be focusing on cloud-based storage, although there will be an option to use a Time Capsule to keep your data a little closer to home. iPhone OS will be utilized as the operating system and the biggest shocker is that it will only cost $100.

John Gruber has chimed in saying that the new Apple TV’s “K66” code name has been in the iPhone OS 4 beta SDK for months.

I suspect that the Apple Remote will be used as the primary control device with the option to use an iPhone or iPod touch with the Remote app installed. But, what will the interface look like? Will there be a browser or app store?