May create massive barrier to competition

Apple has already sunk at least $750 million into its North Carolina datacenter, Asymco's Horace Dediu observes. The information comes from Property, Plant and Equipment information in the company's quarterly statements. Roughly $1 billion was spent on that category between December 26th 2009 and December 25th 2010; the $750 million figure comes from deducting an estimated $250 million dedicated to the future "spaceship" campus.

Critically, the $750 million tally includes only the building itself, not any money spent on servers, workers, research, bandwidth or any other potentially massive expenditures. The original goal was to spend invest $1 billion in the facility over nine years, but Apple may already be well past that amount. The datacenter mainly exists to support iCloud, a set of iOS- and Lion-focused Internet services which only went live on October 12th. The building is also likely handling part of Siri, the iPhone 4S' voice command system, and various iTunes functions.

"What this level of spending implies is that iCloud (and Siri and iTunes) are expensive," comments Dediu. "They may seem ephemeral and even trivial as services, but they require a staggering commitment few can make. Apple made that commitment and they made it early on, before the first quarter billion users were even on the horizon. If platforms are moving from local to distributed and if value moves from selling things to 'getting to know you' and if that knowledge requires infrastructure control then the number of companies that can participate in the market shrinks dramatically. Not only in terms of who has the capabilities, but who could even afford to acquire them."

By Electronista Staff