Google May Launch Music Service to Challenge Apple iTunes

UPDATE: Google is set to challenge Apple, Spotify and several players in the digital music space by launching Google Audio, TechCrunch reported Oct. 21, citing multiple sources.

Google spent the last several weeks striking deals to seed the service with music content from the major music labels, according to the report. The service will allegedly be a departure from the Google China search and download music service the company launched in 2008.

"This new service will be available for at least U.S. users, our sources confirm, although it isn't clear if it's a download or streaming service, or both," wrote TechCrunch's Michael Arrington.

Google will offer enhanced music search with a streaming function. Searching for an artist or song will bring up a box with a streaming link assigned to streams from either Lala or iLike. In an update, Arrington said the launch will be Oct. 28 at a Hollywood concert event.

That's it on the skimpy details, though a streaming model would make sense given Google's predilection for running applications on the Internet cloud. 

Google declined to comment. If such a service does come to fruition it would be yet another front where Google is waging war versus one-time buddy Apple, which has put up a wall by rejecting the Google Voice phone management application.

Google and Apple are increasingly butting hands in the smartphone arena, where Google is seeing T-Mobile, Sprint, Verizon Wireless to offer smartphones based on its Android mobile operating system.

The companies are also competing in mobile applications, and Google is expecting to issue the Chrome Operating System for netbooks next year, challenging Windows and Mac OS X. 

But that may not be all. Google may be taking a page out of Apple's design-the-device-yourself handbook by releasing an actually Google Phone, goes the second big rumor to come out the Googleplex this week.

Northeast Securities analyst Ashok Kumar said Google's design partners told him Google is working with a smartphone manufacturer, possibly HTC, to have a Google-branded phone available this year through retailers. The gadget will be powered by Qualcomm baseband chips.

The idea is to bypass traditional carriers so that Google could control what features and applications run on it -- the exact solution for situations such as Apple's treatment of Google Voice. However, this could also undermine efforts from Motorola, which is betting the company on its Cliq and Droid smartphones, and others such as Dell and Samsung.