Google's music service plans are crystallizing in talks with music labels on plans for a download store and a digital song locker to challenge Apple iTunes in the digital music market. Google is moving forward with plans to release an Android-based Google Music site by the end of the year to compete with iTunes, say reports.

Google signaled its intent to go after Apple's iTunes dynasty in May when it quietly revealed it had acquired Simplify Media to add for Android smartphones. Simplify Media provides an efficient way for users to take music they own on their desktop that isn't copy-protected and stream it to an Android phone.

Since that curious announcement at Google I/O, the talk of Google's music plans has subsided. Now it seems Google's music plans are crystallizing in talks with music labels on plans for a download store and a digital song locker that would allow its mobile users to grab and play songs from the cloud, according to Reuters.

On Google's part, the talks are being shepherded by Google Android creator and vice president of engineering Andy Rubin. The idea is to have a Google Android music service to offer users in time for this Christmas.

Record label executives are reportedly excited about the potential for this offering, which was previewed by The Wall Street Journal in June. The Journal then also reported Google would launch an online music subscription service in early 2011.

Google didn't confirm the news, but didn't deny it either, telling us, "We don't have anything to announce at this time," a sure sign that plans are in motion.

The move would open yet another battlefield between Google and Apple, once fast friends that are increasingly competing for users' eyeballs and dollars in every segment of the web.

While the two companies primarily compete today in the smartphone market, with the Android OS pumped out in 200,000 devices daily as an alternative to Apple's iPhone, the companies will also soon compete in digital television.

Apple just revamped its Apple TV product, lowering the price for the box that serves digital TV for subscribers. Google is launching Google TV this fall, affirmed Google CEO Eric Schmidt at the IFA show in Berlin.

The current signs point to Google aiming to also compete with Apple in music, which appears as difficult as Microsoft's Bing trying to compete with Google in search. The iTunes Music Store accounts for 70 percent of all U.S. digital music sales, according to Reuters, with Amazon's MP3 service and others in the rear-view mirror.

Moreover, Apple isn't standing still with iTunes. The company bought Web-based music service LaLa last year, demonstrating a willingness to adopt Google's cloud computing approach, and has just launched social music service Ping, albeit with bugs.

Internet industry analysts say Google has its work cut out for it challenging Apple in digital music. Current Analysis' Avi Greengart noted that with the exception of Amazon for eBooks, nobody has effectively challenged Apple in digital content.

Content, of course, is the raison d'etre for devices, such as the iPod and iPad, and potentially with Apple TV. Google's Android, appearing on smartphones, tablets, and in TVs, is trying to challenge Apple across all these fronts, but "needs a much stronger content story," Greengart argued.

"Part of Google's problem is philosophical: Google believes everything lives in the cloud, while Apple understands that consumers store content locally on PCs," continued Greengart. "Google has no local content management software, while Apple's iTunes PC software is used by over 100 million people."

Analyst Rob Enderle also questioned Google's moves in music at this stage of the web game, suggesting Google should just buy a music service. "iTunes isn't perfect and to run against Google on phones you'll need a full set of multimedia services, but partnering or buying one rather than building would be a vastly faster and better choice given how undervalued most are," Enderle said.

Enderle also correctly noted that while Apple's App Store has flourished, selling thousands of apps for the iPhone and iPad in 95 countries all over the world, Google's Android Market is quite limited in terms of where developers can sell their apps.

"Getting the labels to work with someone known for unprofitable ventures like this will be a rather daunting task," Enderle said.

Availability

The Reuters story on Google Music may be found here.

Clint Boulton is a regular contributor to our sister publication, eWEEK.

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