February 14, 2014
Apple is quietly building new networks, part of an expanded Internet infrastructure capable of delivering large amounts of content to customers, while providing Apple with more control over distributing its online offerings. It will also lay the groundwork for handling more traffic should the company decide to move deeper into television. Apple has been moving in this direction for a while, since the inception of its iCloud service and in response to rising sales of media via iTunes and the App Store.
Sales from iTunes and the App Store brought in $16 billion in the year that ended in September. The company has been exploring other delivery needs, and may “have broader ambitions for television that could involve expanding its Apple TV product or building its own television set,” reports The Wall Street Journal.
“Snapping up Internet infrastructure supports all those pursuits at once,” notes the article. “Apple is signing long-term deals to lock up bandwidth and hiring more networking experts, steps that companies like Google and Facebook have already taken to gain more control over the vast content they distribute.”
Bill Norton, chief strategy officer for International Internet Exchange, estimates that Apple has recently purchased enough bandwidth from carriers that would allow it to move hundreds of gigabits of data per second.
In addition, Apple recently hired Lauren Provo, a former Comcast exec known for connecting the cable company’s Internet service with other networks, and Jean-Francois Mule, CableLabs’ former VP of technology development. “The hires signal Apple’s desire to bolster its ability to link its data centers with the large networks that can carry its content to users around the world,” suggests WSJ.
Apple may be taking similar steps as other companies that have been breaking away from third party network providers. Netflix, for example, formerly outsourced most of its video delivery work to Akamai.
“In 2012, the streaming-video company cut its costs by creating its own delivery network, called Open Connect, and sprinkling the computers that store its video library around the world,” explains the article. “Netflix’s own data caches now deliver about 70 percent of that kind of distributed content in the U.S., according to network researcher DeepField Inc.”