Apple introduced ALAC--the Apple Lossless Audio Codec--in 2004 so that iTunes users could save music from CD's without a sacrifice in quality. Unlike compressed audio formats such as MP3 and AAC, ALAC does not discard any audio information. Its files are larger than MP3 but half the size of uncompressed lossless audio.
Now the code behind ALAC has been released by Apple under the open source Apache 2.0 license. Developers can freely use and modify the ALAC code to add support for Apple's format in their own software and devices.
ALAC is not the only open source lossless audio codec out there, though. FLAC--the Free Lossless Audio Codec--was released in 2001. But Apple iTunes does not natively support FLAC files.