There is an elephant in the iOS room and nobody is talking about it. In iOS 4.2 which will unify the OS for iPhone, iPod Touch and iPad there is a new feature called AirPlay. It’s a feature of the OS itself and it’s on by default. It allows an iPhone, iPod Touch or an iPad to stream audio and video to the new, small AppleTV. It’s available in any or should I say every app that doesn’t specifically opt out. I’m aware that Hulu Plus opts out. I don’t know any others.

So before an OS is released developers and beta testers work together with Apple to test the pre-release OS rigorously to avoid releasing a buggy OS to the general public. In the case of AirPlay the requisite buttons pop up to allow an iDevice to broadcast to AppleTV but, and this is truly strange to me, the only part of AirPlay which works is the audio. Everyone who has access to iOS 4.2 beta has made more or less the same speculation, namely, that it’s likely that AppleTV itself has to get an OS update before it can receive video from another iOS device. And the strange thing to me is that Apple hasn’t allowed any beta testers to test the video part of AirPlay because they haven’t released the AppleTV update which is necessary to use it.

Now I think this AirPlay is huge. If you have an AppleTV now, you’d have to live in the USA to take advantage of its main feature, that you can which NetFlix on it. Otherwise its mostly a device for streaming stuff from your iTunes library on your desktop to your TV or renting movies or TV shows from a limited selection. Boring.

But after AirPlay any content maker, say Sky TV can make an app for say the iPad that can stream their video content. No reason why you can’t watch Sky Sports on an iPad except that Apple wants to stick its finger in the pie and takes a piece by forcing the content owner to sell their content through iTunes where Apple controls the price, the marketing data and the marketing. That opens up a can of worms.

AirPlay solves all that. Sky can make an app that requires a login. That login requires a subscription. If you’re subscribed you have a valid login address and you can watch Sky Sports on your iPad. And with AirPlay you can watch it on your TV via AppleTV. Nifty. That breaks the logjam that has kept Apple and the content owners from signing a deal and makes the AppleTV one of the most powerful, if not the most powerful television accessory going.

So that’s the elephant in the room. This is all about to break and nobody is talking about it. The iOS update which is going to make it all happen and nobody is saying anything because nobody has seen it.

hmmmm…