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New technology is allowing Apple to deliver high quality 1080p video to the "better than HDTV" new iPad screen without having to dramatically increase the file size of the videos.

The resolution of 1080p, 1920x1080, provides 2.25 times as many pixels as 720p's 1280x720, but the new compression algorithm used by 1080p videos on iTunes can deliver superior quality with only a 20%, or 1.2 time, increase in file size.

The magic lies in the various encoding techniques that are now available on Apple's hardware devices. Apple uses the H.264 (MPEG-4 AVC) codec to deliver its videos, which is an industry standard codec also used for Blu-ray and YouTube. The codec features several encoding techniques that can be enabled to disabled, depending on the power of the decoding hardware - these are packed into "profiles" to allow manufacturers to easily make their hardware compliant. For example, low end devices can choose to only support the Baseline profile, with HDTV using Main, and high capacity storage formats such as Blu-ray using the High profile.

In addition, there is also a "Level" rating that specifies the resolutions and bitrates the decoding device is capable of handling. Again, low end devices will have a low "Level" rating like 3.1, which limits the maximum resolution to 720p at 30 FPS, while high end devices can go all the way up to Level 5.2, to support 4,096×2,048 @ 60 FPS.

The combination of "Profiles" and "Levels" then determine the maximum peak bitrate the video is allowed to use (the higher the bitrate, the better the picture quality, but also increases the file size). 

The improved processors on the new iPad and Apple TV, as well as the fast A5 processors on the iPhone 4S and the iPad 2 now allows for "High" profile to be used, as well as increasing the Level being supported. Whereas previous generation hardware was limited to 30 FPS 720p with a peak bitrate of 14 Mbps, the new Apple TV supports 30 FPS 1080p with a peak bitrate of 25 Mbps, thanks to increasing the Level from 3.1 to 4.0, and using the High profile instead of Baseline/Main.

The other more powerful A5 devices (iPad 2, new iPad, iPhone 4S) has raised the supported H.264 Level to 4.1, which allows for 30 FPS 1080p with a peak bitrate of 62.5 Mbps.

Techno-babble aside, what this means is that, with a higher peak bitrate to play around with, high detailed scenes can now get more bitrate to improve quality, while low detail scenes can still use a low bitrate. This much more flexible use of encoding bitrate allows dramatic quality improvements, without the associated file size increases. It also allows iTunes 1080p video files to be far smaller in size than the equivalent Blu-ray files, which tends to err on the side of caution and use a high average bitrate, even for the low detail scenes. As such, a typical 35GB Blu-ray file, can now be squeezed into less than 5GB on iTunes, and only those with high end home theater equipment or super large TVs will be able to tell the difference.

This technique is not new though. VUDU's HDX streaming service uses a similar technique to bring down the average bitrate of 1080p video from Blu-ray's dizzying 35 Mbps to a more manageable (for today's broadband users, at least) 12 Mbps.

Not quiet convinced? Then have a look at this Ars Technica article, with actual screencap comparisons between Blu-ray and iTunes 1080p, and decide for yourself. While those serious about quality will always want Blu-ray, those willing to settle for smaller screens of the iPad or iPhone, or the streaming convenience of Apple TV, should be more than satisfied with iTunes 1080p.