Apple TV 4K looses wifi connection during idle

John Galt caught that your A2737 model does not have Ethernet connectivity. My bad. (Thanks John)

I also agree with his assessment that a poor Wi-Fi signal could be the issue here. Where is this ATV located in relation to the TC? You may find that simply moving the ATV, even a few inches, may alleviate this issue.

FYI, there are some simple techniques you can use to determine signal quality at the location of your ATV. The following user tip was written about proper placement of extending base stations, but it equally applies to any wireless device.

• AirPort - Optimal Base Station Placement - Apple Community

Oh! I just remembered the A2737 is the one without an Ethernet port. Is it possible you can still exchange it for the one that does? You have 14 days.

In the ATV's settings I can still see the SSID to my network and the IP it has obtained but it has no internet access and receive an internet error from APPs in the ATV, until I reboot.

Those symptoms appear to be consistent with a weak Wi-Fi connection. Given the AppleTV's 4K bandwidth demands, I strongly suspect it needs a much better wireless signal.

I would start your troubleshooting by temporarily connecting this particular Apple TV (ATV) via Ethernet, even if it just means running a long cable to the unit, to rule out any issues with its Wi-Fi connectivity.

If it does resolve this issue, then remove the cable, and then, factory reset the ATV. If it continues to fail, you will need to look for potential W-Fi interference between the Time Capsule and this device. Lastly, if none is detected, then it may be possible, as you expected, that this ATV is faulty.

I know Ethernet is inconvenient but using it obviates a lot of potential problems. Four Wi-Fi "dots" isn't all that great either.

What was the problem attempting to use a static IP address? That might obviate losing the DHCP lease as the ATV sits idle — a setting that you can to alter in the Time Capsule. For what it's worth mine is set to one day, which may or may not be its default. In the interest of advancing troubleshooting try changing it.

As old as it is I'm using the same TC and the same ATV and they work perfectly — but they're wired Ethernet.

bootheflyer wrote:

What happens net wise when ATV goes idle? Does it keep its IP or does it acquire a new when starting from idle?

Like most network clients, it would be your DHCP server settings that would determine how long to provide local dynamic IP address leases. In this case that server would be your Time Capsule (TC). For fixed IP addresses it would depend on how you went about doing so. That is, did you set it at the ATV, or at the TC by using DHCP Reservations? If you set the fixed address at the ATV, be sure that it is outside of the DHCP range provided by the TC.

FWIW, it is a preferred practice to assign fixed addresses to network devices that need to be accessed by others. Examples would be a NAS, a printer, and with media devices ... like your ATV.