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Friday, October 22, 2010, 05:40 am PT (08:40 am ET)

Apple may double North Carolina data center to 1M square feet

While the exact purpose of Apple's 500,000-square-foot data center in North Carolina remains unknown, a new rumor says the company is already considering expanding the server space to a million square feet.

Citing anonymous sources at Apple, John Paczkowski of Digital Daily reported Friday that Apple is currently eyeing a major expansion to its server farm in Maiden, N.C. The report stressed that Apple is currently considering the expansion, suggesting it may not come to fruition.

Apple first announced the location of its secretive massive data center in July 2009. The company has has hired staff for the $1 billion facility, but its exact purpose remains unknown.

Paczkowski speculated that the massive server farm could be a central component of Apple's business strategy going forward, as evidenced by the release of the new MacBook Airs on Wednesday. Chief Executive Steve Jobs indicated the new notebooks are the "future" of the entire MacBook line, as the new lightweight MacBook Air models sport only flash memory inside, with no spinning hard drives.

On the low end, the entry-level 11.6-inch model has just 64GB of internal flash memory for $999. If Apple's data center were to offer cloud-based iTunes, or expand MobileMe's iDisk or Gallery services, the report speculated, "even the 64GB Air might seem like an attractive option to the high-end user."

"Saving to disk is slowly becoming a fixture of the past and, as Apple's recently rejiggered Apple TV business model demonstrates, streaming is the future," the report said. "Which makes perfect sense, when you think of the MacBook Air as the future of the notebook."

Even if doubling the size of the server farm also doubles its $1 billion total cost, it would be an easy investment for Apple, which recently revealed it has $51 billion in cash and investments. This week, Jobs said his company plans to use its war chest for big moves, including major acquisitions, but not "stupid" ones.