[roc]

If they do offer a display, it's almost certainly going to be in addition to the set-top box. A sort of "this is how it should be" offering that's tightly integrated and reasonably high quality, that competes in the segment of the display market where there are decent profits, but where most consumers simply don't shop. Not unlike the situation with Cinema Displays themselves.

As for revenue: AppleTV is, up-front, a logical necessity to keep iTunes relevant as "living-room video" becomes increasingly digital. They'll likely integrate cable "packages" not unlike the way they've done Hulu/Netflix/MLB and use the thing as a "break even"-ish business to make the whole ecosystem more attractive. Which is to say: there needn't be a whole lot of revenue for this to be a necessary move for Apple.

Though there's a good chance chance Apple may do an app store for the AppleTV, in which case gaming is likely to not only drive set-top upgrades on an iPod schedule ($100-200 a pop, upgrades every other year or so), but also reinforce iOS device sales for smart-controller/second-screen-style game and app functionality. This has the potential to combine (direct sales and 'halo' sales) for iPod-like device revenue.