Many have made the case that next year, the fourth generation Apple TV will receive a discount to $99, when a fifth generation premieres. Everyone pulled $99 out of their butts, but it sounds like a good number. We don’t actually know if the device is even on a yearly refresh cycle at this point though since there’s no pattern. It is still conceivable that it may be the case, but that’s still a 40% price increase to the entry point.
I do think the new Apple TV will see a price drop next year, but I’m still not convinced that Apple is going to be on a yearly release schedule for this device. The iPod and iPhone have always made sense to iterate every year because they’re small, portable devices that often break. And the pressure of two-year cellular contract put a limit on how long Apple could realistically go without releasing new iPhones.
Set-top-boxes are a different animal, though. The majority of them are purchased, brought home, set up, and never move until they’re retired years later. Is Apple going to convince the mass market — or even a large enough segment of it — to buy a new one every year?
Game consoles are probably the closest analog to the Apple TV. And in that market companies might release minor hardware revisions, but there’s typically 4-6 years between new, full-scale console releases. My guess is that Apple will stick to the 2-3 year release schedule that they’ve historically had for the Apple TV. But between each major release, they’ll make under the hood improvements to reduce manufacturing costs and perform price drops to keep everyone’s attention.