Apple has completed work on an online music storage service and is set to launch it ahead of Google, whose own music efforts have stalled, according to several people familiar with both companies' plans.
Apple's plans will allow iTunes customers to store their songs on a remote server, and then access them from wherever they have an Internet connection, said two of these people who asked not to be named as the talks are still confidential.
The maker of the wildly popular iPhone and iPod, Apple has yet to sign any new licenses for the service and major music labels are hoping to secure deals before the service is launched, three of the sources said. Apple has not told its music partners of when it intends to introduce its music locker, they said.
An Apple spokesman declined to comment.
Amazon.com launched a music locker service earlier in April without new licensing agreements leading to threats of legal action from some music companies. At the time, Amazon argued that its so-called Cloud Drive service does not need licenses, and said uploaded music belongs to the users.
Last week, however, Amazon held talks with some labels to reach agreements for a new, more sophisticated locker service.
Apple, Amazon and Google are battling for control of new digital media platforms through which everyday users will access their music and videos.
While Amazon is the leading e-reader maker, Apple and Google are competing on mobile platforms like smartphones and tablet devices.
Google had been expected to launch a music service as a feature of its Android mobile operating system as far back as last Christmas.
"They keep changing what they're asking for," said a label executive who asked not to be named because the talks are confidential.
Two of the sources said Google originally wanted to launch a basic locker service and an 'iTunes-like' store. In recent weeks it has suggested exploring licensing for a subscription service, they said.
Talks are ongoing with major music labels including market leader Universal Music Group, owned by Vivendi, as well as Sony Corp's Sony Music Entertainment, Warner Music Group and EMI Group.
Music industry executives are pointing to changes in top management at Google as a possible reason for the technology company's uncertain music strategy. On April 1, co-founder Larry Page took over as chief executive with Eric Schmidt moving up to executive chairman. Android chief Andy Rubin led most of the early talks with the labels.
Apple and Google are keen to offer services that give music fans more flexibility to access their media wherever they are rather than tying them to a particular computer or mobile device.
In late 2009, Apple bought Lala, a cloud-based music company, but closed it down in April 2010, leading to speculation that it would launch an Apple-branded cloud service.
Earlier this month, Google bought Canadian mobile music company PushLife as part of its drive to help Android users share and purchase content across devices. Last May, Google also bought Simplify Media, a remote media company, but has since closed it down.