Rumor: Microsoft considering a smaller, cheaper digital-only Xbox to compete with the Apple TV

[Pemalite]

Ditch the optical drive, ditch the mechanical drive, make the SoC smaller, sell it for $200.
Maybe even go $150 if you don't include any accessories, only a TV remote.

Let it be digital only and still have the capability for emulating your digital Xbox 360 (And hopefully eventually, original xbox games.)

And then watch the sales pickup, especially in low-income nations.