Even though Apple calls its current TV offering a “hobby,” former Apple CEO John Sculley believes that a move into the TV market is “Apple’s game to lose.” Mr. Sculley was asked his thoughts on an Apple television effort by Bloomberg, and he said that Apple has the tools to do what no one else has been able to do, own the living room.

Details of an unannounced Apple TV settop box continue to leak, with a Wall Street Journal report claiming the device will feature an Internet-based digital video recorder (DVR), access to full season, on-demand TV shows, and, of course, an icon-based user interface that threatens to suck considerably less than the interfaces offered by cable providers.

Apple is currently in talks with U.S. cable television providers to adapt the Apple TV device into a full-featured set-top box for viewing and recording live television. The proposed device would merge Apple’s existing Apple TV online and local streaming capabilities with TiVo-like functionality for live television.

Apple quietly updated the Apple TV overnight to include a new Hulu Plus channel. The update gives Apple TV owners a new way to watch network television shows and movies on demand, and to see old shows that may not be available through Netflix streaming.

A report coming out China said on Friday that Apple’s much-rumored television set could be on its way in time for Christmas. The source of the story is the news that Hon Hai Precision (Foxconn’s parent company) will be taking delivery of LCD TV panels starting in the third quarter. That’s not only earlier than originally expected, Brian White of Topeka Capital said that these panels are intended for Apple’s television set.

Apple released Apple TV Software Update 5.0.2 on Tuesday, a release that includes an Australia-specific issue with Parental Controls. The patch notes say simply that the patch, “Addresses an issue which caused content restrictions to be incorrectly applied for the iTunes Store in Australia.”

Michael White, chair of DirectTV, isn’t too concerned that Apple will introduce TV products that will obsolete DirectTV technology. And he doubts that “Apple’s interface will be so much better than DirectTV’s that people will be willing to pay for an extra box.”

Unnamed sources claim Apple will introduce a new OS for the AppleTV at the company’s annual Worldwide Developers Conference in June. The new operating system is said to include more features than the current AppleTV OS, and apparently will drive Apple’s rumored HD television, too.

Apple CEO Tim Cook has been working on his Morse Code, judging from the talk he gave Tuesday night at AllThingsD’s D10 conference. Among the many things he talked about, Mr. Cook gave us more information about his company’s plans for a television set, if you don’t mind decoding the dots and dashes.

Apple’s AirPlay technology allows users to wirelessly stream content from their iPads, iPhones, and iPod touches to their Apple TV (and thus to their TV). Despite its potentially disruptive nature, however, Time Warner Cable’s CEO Glenn A. Britt had never heard of it until asked by a reporter during a group interview.