Apple Lossless Encoding (also known as Apple Lossless, Apple Lossless Audio Codec or ALE) is an audio codec developed by Apple Computer, for lossless encoding of digital music.
Apple Lossless Encoding was introduced along-side iTunes 4.5 in April 2004.
Apple Lossless data is stored within an MP4 container with the filename extension .m4a. Contrary to popular belief, Apple Lossless is not a variant of AAC, but a totally new codec. iPods with a dock connector and recent firmware can play Apple Lossless encoded files.
Typical compression ratios from AIFF source files on a CD are 3:4, i.e., three fourths the size of the original file.
Source: http://en.wikipedia.org/wiki/Apple_Lossless_Encoding
The Apple Lossless Audio Codec was reverse engineered by David Hammerton.
“It turns out that most of the algorithms in the codec are fairly well known. ALAC uses an adaptive FIR prediction algorithm and stores the error values using a modified rice or golumb algorithm.”
He also provide a C implementation of a decoder.
http://craz.net/programs/itunes/alac.html