Apple (AAPL) Looks At Free iTunes For Everyone

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Apple (NASDAQ: AAPL) is in conversations with the music industry about offering its entire iTunes library free. It would recoup the loss of revenue by changing more for its iPod hardware.

According to the FT "Detailed market research has shown strong appetite among consumers for deals bundling music in with the cost of the device."

Since none of the major music publishers have signed on yet, it will be interesting to see if Apple tries to use its substantial leverage with them to create the new program. This would probably involve getting one of two of the publishers to agree to an altered partnership with Apple. Jobs & Co. could then pressure the balance of the industry to get in line.

Due to Apple’s share of the music download market, if the iTunes store is available free to purchasers of the company’s digital media products, it is likely to affect handset companies trying to start their own download operations. If Apple changes it model often enough, no one will be able to keep up.

Douglas A. McIntyre