There has been speculation for years that Apple would one day release a television of their own making. An honest-to-goodness Internet-ready television, a so-called “smart TV,” that can take advantage of some of the resources the company has built up like iTunes or the App Store. And a new report suggests that day is drawing nearer, with Apple working to release a television by the end of the 2011 year.

“Apple TV” has always struck me as an odd name for a product that isn’t actually a TV. It’s a great product, according to my friends who have one, but it’s not a television. It’s a box that lets users stream content from Netflix and other sources to a separate television device. Google’s TV product is simply called Google TV, but it appears Apple won’t be able to go in that same direction.

So what will Apple’s TV be called, if the “Apple TV” name is already taken? Apple Smart TV? iTV? iTelevision? I suppose it’s possible they’ll kill the old Apple TV device. It never really sold all that well, and most of its functions and features would be duplicated in an Internet-ready television anyway.

There are as many reasons for Apple to want to do this as there are for Google. Apple has millions of customers playing games, using Facetime, and watching video on devices like the iPhone and the iPad. Many of those activities are a natural fit for the television and the family room as well. They have an army of fans that will have huge interest in this product, which should help it carve out some market share.

There are no details at this time. We don’t know the feature list, the size, or the price. And all those things could directly impact whether or not this product takes off. So we’ll have to wait for the official announcement, or at least until more information leaks, to have a better handle on how it might perform.

But it’s exciting news regardless. I believe these “smart TVs” are eventually going to be a hit. Apple’s might struggle early on, as Google TV has, but the world is moving in this direction and it’s all but inevitable. It makes sense that both companies are trying to gain early position to help enhance and take advantage of their existing products and services.