Apple will ditch the set-top box-like device that’s used on the current iteration of its Apple TV in favor of using mostly cloud-based Internet video, according to Engadget.

Engadget, citing anonymous sources, also said the next version would put a media player into a small device that uses the iPhone 4 operating system. One of Engadget’s sources described the next Apple TV as an iPhone without a screen, with just a power socket and video-out ports.

Another tweak to Apple TV’s Internet video platform, which hasn’t exactly set the world on fire, is a lower price point. While the current system costs $230, Engadget reported the new device would cost just $99.

Engadget said there was no information on whether the new device would support Apple’s App Store and apps, but given the success of both, it seems likely.

Apple’s move away from local storage of video to streaming from cloud-based storage, if the rumors are true, would come on the heels of Google’s Google TV platform that’s based on the Android operating system.