Apple Wants "Cloud" Music Service

Apple Wants "Cloud" Music Service

Apple is negotiating with record companies to allow iTunes customers the ability to listen to music on multiple devices, in a move that would shift its service to cloud-computing for universal access on its mobile products.

Under the proposed arrangement, the Cupertino, Calif.-based company would offer a permanent backup solution — with unlimited downloads — for previously purchased music. All mobile devices, including iPhones, iPads and iPods, would be able to access the service, linked together with the same iTunes account.

Such a move, if successful, would be a step closer to giving users universal access to content — centrally stored on the Internet — and free up limited storage space.

An agreement may be announced by mid-year, according to people familiar with the matter, though record labels are still reluctant to loosen restrictions on downloads. Rival Google has long strived to offer such cloud-based music storage for its Android smartphones, but even it hasn’t been able to convince record labels to take part.

Apple seems the most likely to pull together a “cloud” deal due to its clout. The company currently dominates the digital music download market, with a 69 percent share, even as subscription-based streaming services such as Pandora Media are gaining ground, particularly on smartphones.

In addition, record labels are hurting, so they may agree to the new service for incremental revenue streams. Digital download sales overall have stalled, with track sales rising just one percent in 2010, and album sales falling 12.7 percent, according to research firm Nielsen.

Earlier this week, reports surfaced that Apple was in talks with music industry executives to offer higher-quality music downloads, potentially creating a premium product and helping to reignite the stalled digital music market, though it would require reconfiguring mobile devices to accommodate higher-quality audio.

Next week, Apple will unveil an update to its operating system, which, among other things, will allow for greater ease of music sharing across devices.

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