Seeking Alpha
Research analyst, tech, internet
Profile| Send Message|
( followers)  

By Carl Howe

According to Mac OS Rumors and The Register, Apple is considering building in an encrypted BitTorrent client into its next version of Mac OS X, Leopard.

BitTorrent, for those unfamiliar with the technology, is a peer-to-peer file-sharing package. The concept being bandied about is that Apple would use this technology to distribute very large files such as movies both faster and without paying for quite so much downstream bandwidth.

Apple has a history of introducing new technologies to ensure faster and more efficient downloads. It was one of the first companies to widely embrace Akamai's content distribution network for movie trailers. And introducing an encrypted BitTorrent client in Leopard would be using its customers as a distribution medium, Apple would provide incentives such as credits at the iTunes Music Store and Apple Stores to those customers for the use of their bandwidth.

But there's another business reason that Apple might want to introduce this technology. With the future of Internet "net neutrality" in doubt due to Verizon (NYSE:VZ) and AT&T (NYSE:T) posturing to introduce new premium access fees for content providers, Apple may be looking for ways to bypass this carrier surcharge.

Just as Apple built Mac OS X to run on Intel to hedge against PowerPC production issues, this may be another hedge against other businesses trying to piggyback on new business models that Apple creates. By engaging its loyal customer base as a software distribution network, Apple could both significantly reduce its bandwidth bill while avoiding the need to pay for premium delivery.

But at the same time, Apple could be looking to create an even more powerful marketing network of product advocates. By engaging its customers to help it with content distribution and compensating them for it, Apple turns its customers into Apple distributors. For those journalists who struggle to deal with "the Apple faithful" (as they are often called) now, watch out. If this new technology takes hold, the bond between Apple and its loyalists may become even stronger.

Source: Apple's BitTorrent Bundling Could Dodge Carrier Surcharges (AAPL)