As with all rumors, please take the following news item with a grain of salt until we receive official confirmation or denial from Apple.
Apple recently filed for a trademark extension with the US Patent and Trademark Office and this particular extension has had the industry buzzing. Why? It appears that the trademark covered a wide array of gaming products, which could very well include the console that Apple has been rumored to have been working on for some time now.
It included "handheld units for playing electronic games", "handheld units for playing videogames", "stand-alone video game machines", "LCD game machines" and "electronic games other than those adapted for use with television receivers only".
Apple refused to comment on its trademark applications but many have interpreted the filing as a sign the company will enter the lucrative but crowded video games business, competing with Microsoft, Nintendo and Sony.
Apple has also been placing ads for game developers, which could be another strong indication that we'll see an Apple console sometime in the future.
If Apple does release a console there is some debate as to whether it'd be an upgrade to the existing Apple TV, or a whole new product.