What's that 40-gig hard drive doing inside my Apple TV?

I, Cringely: Appeerances Can Be Deceiving. "I want to know the identity of the Apple TV's H.264 decoder chip. There's a lot to be learned from the identity of THAT chip. Remember you heard it here first.

If you are wondering what Apple might accomplish with such a peer-to-peer distribution system, it would be nothing less than the undermining of TV. First Apple would eliminate its current dependence on Akamai, reducing its network costs for iTunes by about 100X, making the network costs effectively free. Hello HDTV!

Second, Apple would have one or many content channels roughly equivalent to an HBO, Showtime, or perhaps Discovery. Yes, I think Apple will do direct content deals, buying programming that it will then either distribute to subscribers or support with Google ads, thanks to Google CEO Eric Schmidt's position on the Apple board. Apple's network will give you the same content with or without ads, delivered from the same servers, one of which may be underneath your TV.

The business case for Apple is downright amazing. Lowering network costs by 99 percent will enable the company to add to its portfolio the equivalent of half a Time Warner. Apple becomes a cable company without trucks or network costs. It becomes a whole bunch of cable networks with an instant audience the exact size of the iTunes registered user base, which is frigging enormous. Add $40 billion to market cap, no waiting." There's no doubt that Apple has more innovative business models than its equally innovative products since Jobs came back.

Considering how much content investment iPod users have made with Apple, the case here is very compelling. If I was an individual producer with short clips to sell, I would contact iTunes division first of all.