You're missing the point, Chris. I'm well aware that whatever does the encoding, whether hardware or software, is what gets licensed. And, obviously, the drive itself isn't doing the encoding. The theory, however, is that by tying the software directly to the hardware, they may have been able to convince the MPEG Licensing Authority that they should be licensed per drive instead of per copy of software. Apple is not your average two-bit company, they've got leverage with just about every other company they work with, so it's not unlikely that they got the rules bent just slightly. Hence, why they keep switching between ATI and NVIDIA video cards as their preferred vendor, or how they got their discount on NAND flash from Samsung and other manufacturers, or even how they forced Microsoft into the deal of investing $150 million plus continued development of Office and IE as a way to avoid patent infringement litigation. It's just a possibility, I'm not going to say that it's right or wrong, and unless you were witness to the deal, it's impossible to prove or disprove it. It's no different than your "Apple hardware lock-in" theory - just a guess. Either one is entirely plausible, and I doubt that anybody on this list could definitively prove it one way or another (or, for that matter, prove a third theory that nobody had even considered). Chris Olson <chris.olson at astcomm.net> writes: > Nope. Wrong theory. MPEG-2 is licensed per unit in hardware or > software. If you have a DVR cable set top box, for instance, the > hardware encoder/decoder will a have per unit license fee. On the > Mac the DVD burner does not have a hardware MPEG-2 encoder/decoder. > Encoding is done in computer software (iDVD) and the license fee for > that encoder is already paid for, as well as the decoder in DVD > Player. If you have another MPEG-2 decoder, such as the one > available for Quicktime, then you have to pay yet another license fee > for that decoder since it comprises another "unit". Hence the MPEG-2 > decoder for Quicktime is not free.