Apple’s insistence that the Apple TV is merely a hobby seems disingenuous at best. They haven’t seen nearly the success with the Apple TV as the rest of their hardware but judging by rumors of a product overhaul, they’re likely going to be taking on Google TV in a battle for the living room. Here’s how they seal the deal.

The way the television market is setup now, nobody really pays for the cable box itself. Instead it’s likely to be rented to each subscriber for a small fee. Apple’s next TV endeavor will have to break consumers of the idea that the hardware appears to be free. A while back Engadget heard Apple aiming for a $99 price tag but if you’ll need one for every TV in the house, that’s not likely to fly. If they can power multiple TV’s from one box, $100 doesn’t sound so bad. But will it to the average consumer? Who knows.

apple tvGoogle TV isn’t so much a service as it is a layer on top of the service you’re already paying for. Apple’s strategy should be something completely different and a way to kill the cable subscription many likely feel they’re overpaying to get. Apple needs to find a way to free the networks from the cable companies in an equally profitable way that gets as many on board for the product relaunch as possible.

Cable plans today consist on average of about 70 channels depending on your provider. Of those 70 channels, how many does the average consumer watch? Not all of them and probably not even half. So why are we playing for channels we don’t want? The new Apple TV should shatter this model by using an a la carte method, allowing the consumer to choose how many and which channels they’re willing to pay for. Maybe Apple offers channels in packages of 10 for $10 per month. Those ten channels are chosen by the consumer with a similar payout to the networks that we see with iTunes and the music industry. If $.99 per channel appears low, figure out the number of channels you’re currently being fed compared to your monthly bill. Chances are, divided equally, each channel comes out to less than the $.99 price point.

Apple – or anyone really – has a chance to shake up the television industry in a big way. It’s going to take more than TiVo integration and instant access to the iTunes television catalog to make a splash but if Apple is ready to make it in the TV market, they’ve got a lot of consumer habits to break. Can they do it? What do you think their strategy will be? Share your ideas in the comments.