Plans by Viewsonic to launch a smart HDTV set powered by Boxee's popular media center software have been canceled, both companies have confirmed.

The project to produce a TV set running Boxee, which was due out before the end of the year, was cut short by Viewsonic. The company cited high costs of production and underwhelming consumer interest in Internet-connected TV's, according to GigaOm's New Tee Vee blog.

This news comes several weeks after poor sales forced Logictech to cut the price of its Google TV-powered Revue set-top box. Boxee's own offering, the Boxee Box, also got a price cut recently.

The Logictech Revue and Boxee were both originally priced considerably higher than the $99 Apple TV, which has sold relatively well on Amazon, despite only being what Steve Jobs famously referred to as a "hobby" for the company.

Will Apple's HDTV Increase Demand For Smart TVs?

Apple TV may not be a top priority at the moment, but the company may be playing a more prominent role in our living rooms soon. Apple has long been rumored to be produced a smart HDTV set of its own, which may be on the market as soon as March 2012.

If Apple's impact on the markets for smartphones and tablets is any indication, an Apple-branded HDTV may serve to popularize connected TVs in a way that Boxee and Google TV have failed to thus far.

Few doubt that the future of the living room will be Web-connected, socially-engaged and interactive. In fact, this picture is already coming into focus thanks to mobile technology, social networking and the rise of "second screen" apps. What remains to be seen is how the connected TV market will shake out, and whether Apple will play a significant role in its development.

For its part, Boxee is still putting out set-top boxes. In addition to its D-Link-manufactured Boxee Box, the company has also partnered with Iomega, who will produce a Boxee-powered box with built-in storage of up to 2 TB.