The problem here is that extreme scalability: With TVs you just not only deal with all types of humans but also with all types of feeding equipment. Second is a problem you don't have in the phone market. There are some 2 or 3 mobile transmission standards worldwide to be covered and you're set.
I think the major problem is NOT the integration of the Apple TV box into the TV. As even grandma knows how to switch source she already knows how to switch to the AppleTV. Probably Apple could just implement kind of an HDMI command that tells the TV to switch source to it, then all TV set vendors are free to adopt it. And then tell me why Apple should take the risk of producing large panels with low margins ? Also, an Apple HDTV would be required to eat all signals from the myriads of existing STBs, DVRs and stuff... and the Apple logo on the screen could then be identified with that crap coming in from outer there... maybe sluggish STBs, bad signals, crypto-DRM and the like... no way!
Other way, if Apple limits interface to zero - which would be typical Apple - that could even distract those users which are said to be non-geeks, the grandmas. This problem just does not scale! We have to live with current TV sets, there is no way around !
As a dev I was overwhelmed, that iOS5 has many new APIs regarding screen mirroring and respective ViewControllers, aspect ratio and overscan control of 2nd screens. This strongly points to a iPad/iPhone remote control strategy which we already have and which is by far best. It also considers that Big Screens are becoming less important as we more and more watch on the mobiles itself or want to quickly switch displays. A core Apple HDTV does NOT fit this strategy.
As AppleTV2 owner I really like this device and I see friends who are rather non-tech also using it with joy, if they already own iDevices. The problem also is not search in my opinion: On day 1 I look up show A, on day 2 I query for movie B but I found out that I mostly search for the same stuff. The still existing true sex appeal of TV networks is their random character: People zapp around to get 'invited', they wanna be surprised by something they didn't expect...and stay there for a while. They don't wanna 'search' for something! GENIUS could be an Apple offering here.
I don't think that Apple can ever replace TV networks. Sorry, but people also want regional news, silly game shows, docus, adult stuff, child stuff, exotic sports events and and and. It's just waaaayyy different to cover all that on an 'iTunes TV' just like with music. Music is international to 90%, Apps are international to 90%. But TV stuff is REGIONAL, highly specialized and exotic to 90%. It's not suited for Apples distribution model. And why should any provider of such exotic and regional content jump on Apples ship ? I live in Berlin, Germany and so how could our regional TV networks be forced to offer via an 'iTunes TV' ? No way!
It's not about cracking up the HDTV set hardware, and it's also not about cracking up existing content delivery models: how much does Apple earn from iTunes Music+Movies+Apps today and how much more from iPhone sales ?
Crack up the existing concept of a 'movie' from ground up! It's now 100y old and people have already seen every imaginable sujet/plot/theme now in 1000 versions. It's not the tech complexity, it's not the channel complexity, it's the uniform ART which needs to be cracked up ! People don't buy music because since hiphop & techno there has been nothing revolutionary anymore. Same with movies. Today from 100 movies I see there might be five which I rate as 'interesting' or 'nice', the rest is just boring. I think now it's time for technology to step in and revolutionize the formats, create new art !
I'm not Steve Jobs so I have no clue how to do that, but Isaacson in his book heavily stresses Jobs' position at the crossroads of tech and arts, so this might be the key: don't invent the 1001th version of a home theater but make the tech part of the art ! Kind of a 'movie' that bears a touch of 'holy shit!' interactivity which only plays on Apple devices. If the studios don't want to play that, then Apple go and directly work with the artists ! 'From the ground up' means just that.