One of Apple's existing data centers

One of Apple’s existing data centers

The WSJ reports that Apple has been quietly making major new investments in Internet infrastructure in a move which may simply be designed to boost the performance of its existing online services, but which could also be in readiness for its upcoming television product.

Bill Norton, chief strategy officer for International Internet Exchange, which helps companies line up Internet traffic agreements, estimates that Apple has in a short time bought enough bandwidth from Web carriers to move hundreds of gigabits of data each second.

“That’s the starting point for a very, very big network,” Mr. Norton said … 

Apple also made a couple of senior infrastructure hires in September: Lauren Provo from Comcast and Jean-François Mulé, a former technology VP at a TV R&D company.

Apple, of course, already shifts a great deal of data though iTunes, iCloud and the Mac App Store. Historically, it has out-sourced most of that to third-party Content Delivery Network (CDN) companies, with Akamai believed to be Apple’s key supplier, while StreamingMediaBlog, who reported the Apple CDN buildout yesterday, names Level 3 as another major supplier.

Apple building its own CDN would give the company greater control and would likely boost performance for streaming media in particular. This is the approach taken by Netflix, for example, which stores its video content in a number of data caches around the world to enable faster and more reliable delivery.

An iPhone user who subscribes to Sprint Corp., for instance, might download a song more quickly if Sprint’s network links directly to the Apple data center storing that song, rather than channeling the file through a series of middlemen.

So the move may mean nothing more than improving the delivery of Apple’s existing services, but the timing is at least interesting. 2014 is the year for which Tim Cook has said that Apple has “some big plans” and “really great stuff coming.” A new Apple TV is believed to be one of the new products on the way, and building a large content delivery network would certainly be a logical part of the preparations for such a product.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

12 Responses to “Apple buying Internet infrastructure to boost performance, possibly prepare for television”

  1. The dance between traditional content providers and the new technorati is fascinating. I’m tempted to say I’d like to be a fly on the wall of the executive conversations between Apple and Comcast, but it’s likely a very disheartening discourse focused on protecting current margins.

    • Ben Lovejoy says:

      I suspect you’re right. As someone who hasn’t owned a TV for many years, I’ll be fascinated to see whether Apple can come up with something that will sell it to me …

    • Agreed. Comments like AT& CEO Randall Stephenson’s about the regrets of unlimited data plans and lost revenue by allowing iMessage to run over their data plan instead of SMS. Especially with this quote in regards to it: “That’s disruptive to our messaging revenue stream.”

      Obviously fiber costs money to light up, and companies have a right to make a profit. I’ve no qualms with that, nor the traditional aspects of supply and demand. But it is very concerning when new and alternative technologies are purposefully suppressed or outright withheld simply because the natural progress of things threatens a competitor’s revenue stream. Case in point: the amount of cord-cutters that are reverting to antenna television and video streaming for their entertainment needs, and ISP’s desire to financially discourage people from doing so.

      It would be revolutionary if Apple & Google were able to cohesively work together to wire-up the entire United States with the government’s help. Google drops fiber to cities and homes, Apple provides the neutral backbone. That would be one enormous threat to the existing ISPs who would either need to become neutral themselves in regards to traffic in order to keep customers, or then see their data subscribers dwindle as well as their TV ones that kills their profit. And you can bet that’s on all their minds right now…

    • Traditional media companies should never have been allowed to buy up ISPs.

      The fact that the delivery system for new media distribution are being controlled by those who still want to sell you the old is crazy. The fox is indeed guarding the hen house.

      This is no different than the how the studios used to own the theatre chains. The government (correctly) forced the breakup of those ownerships in the 40′s, and that should absolutely happen here too.

  2. “2014 is the year for which Tim Cook has said that Apple has “some big plans” and “really great stuff coming.””

    He said the exact same thing in 2013 and 2012.

    • I don’t know about 2012, but he certainly did not say that in 2013. In fact, his comment that 2014 would be a big year with a new product category was all over the news in 2013 because the Wall Street analyst were calling for his resignation because apparently Steve Jobs released a new product category that revolutionized life every year.

      Now that it is 2014, I believe that Wall Street analyst have shortened the time between Steve Jobs’ revolutionary products to one a day.

      All joking aside. Tim Cook was very clear in 2013 when he stated that Apple’s big year would 2014. Now to see if he and Apple can deliver.

  3. PMZanetti says:

    Whatever their plans may be, they had better have something in store for late Q1 or early Q2. 2013 was a major disappointment in retrospect. Yes, the iPhones and iPads were great and lived up to expectations….but they are givens….Apple needs to innovate keep up with iOS to drive what is now its core business.

    But the lack of other ventures by Apple is just pathetic. It shows stagnation.

    • Air Burt says:

      “Innovation is saying no to 1000 things.”

      Apple not doing other things is Apple doing a good job at being Apple. Companies that try to be in everything are usually only mediocre at most of them. Apple is all about focusing on certain areas and making great products for them. For that, they continue to do well. New products will come when they meet Apple’s standards. No one even really knows what “innovation” means anymore.

      But the lack of Samsung building a car is just pathetic. It shows stagnation.

  4. Only reason why people feel disappointed at Apple’s “lack of innovation” is because they know something is coming but just dont know when. This is one of those cases where people enjoy surprises but at the same time dont like them. Give Apple the time it needs to get it right. Just reading this article shows the possibility of just how big this vision may be. Its not simply slapping some materials together and releasing it. It takes time to innovate and trust me their innovating at rapid speeds, the amount of patents and purchases being made in the background prove that. Be patient, you dont want a great company coming out with products like Samsung just cause of pressure from impatient “would be customers”

  5. The trick is identifying which markets are ready for disruption.
    It’s not easy because everyone looks at the status quo and sees a large monolithic network of businesses. Surely change means a small adjustment to one of these entities?

    Disruption means the entire monolithic edifice is undermined, and collapses under its own weight.

    The current TV distribution model is super-ready for disruption.

    At one end there are the content makers, and the other end is a screen. Everything between the two ends could be torn down and replaced with a better, simpler solution.

    Such a change would have three effects
    It would make the content creators happy, because they’ll get more subscribers and more money.
    It would make the users happy, because they would get a better service, a better interface and pay for less useless hardware.
    But it would make those people in the middle very unhappy.

    If you are PVR maker, a cable card installer, a call-center operator, a remote control maker, a satellite installation engineer, you might be out of a job. You are out of a job because the end customers will suddenly wake up one day and realise they don’t need you. They just want to click and watch content. They don’t want to buy PVRs or have 3 boxes in their house. They want to watch on tablets, or on the kitchen TV. They don’t like engineers coming to the house. They really don’t like billing centres.

    The only people who occupy that middle who might do okay are the ones who own the pipes. Because we still need pipes. And if they see how future is going to be they’ll jump from the old model to the new. If they are dumb, they’ll try to prop-up the status quo.

    That won’t last long.

    • The biggest problem with your theory is that those people in the middle, the ones that you say are doomed, well they are also the ones that own the pipes that you say are necessary in the last paragraph.

      Marcus Moore, has the truth of it in his comment above. The fact that they old guard in media were allowed to be the ISPs was a blatantly stupid move for our society. And until we see legislation that makes them stop with their conflict of interest or we see some huge infrastructure change that will establish a new ISP then we will never see that sea change in TV.

      Personally, I wish that Apple would spend some of their billions to buy Sprint or T-Mobile. Then, reproportion their cellular 4G LTE network to content delivery. Could you imagine if Apple coupled their AppleTV with a free cellular signal that coupld deliver content at ~100Mbit/sec speeds? No, ISP caps to worry about.

      Of course, that is a dream right now with several issues. However, for Apple, a company with enough cash on hand to buy both Sprint and T-Mobile outright and still have close to $100 billion left over. It isn’t anything that they couldn’t feasibly do. At least in the US.

    • Agreed, big companies such as Comcast and Verizon will join the transition. Although they won’t like it they will make quick adjustments to billing Equipment and interface while raising the cost of their internet plans to balance out the sheets. Then we will have a new problem on our hands… $$$$$ ISP raising fees to keep their spreadsheets green and business healthy