Apple plans to have unlimited music option in iTunes

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Earlier, Nokia had a special agreement with Universal Music and will offer“comes with music” phone deals. Customers pay a lump sum for the phone and they can listen or download the entire music collection from Nokia for free. Apple is also planning to adopt a similar model for iTunes.

Steve Jobs refused to offer this unlimited music option before. Napster, Real Music and others only offered “pay to own” music option. But what changed their mind now is not clear. Apple refused to comment on this rumor.

Nokia is supposed to have offered $80 to the Universal Music for every phone they sold to their customers for the “comes with music” phone option. Apple doesn’t want to offer a hefty amount, and instead wants to offer $20, which the music labels are not willing to accept.

According to FT.com, the price seems to be the contention between the two. One of the executives in this negotiation between the two told FT:

It’s who blinks first, and whether or not anyone does blink,”

If Apple refuses, they may offer this option to other phone companies. The executives also told FT.com that deals bundling music with the cost of the device or a monthly subscription model seems to be popular with customers.

One executive said the research had shown that consumers would pay a premium of up to $100 for unlimited access to music for the lifetime of the device, or a monthly fee of $7 to $8 for a subscription model.

iTunes is not a big money-maker for Apple compared to its hardware sales, so Apple may be rethinking the iTunes model with unlimited music option. There may be a subscription plan for the new iPhones or it may have unlimited options for both iPods and iPhone.

Nokia will launch these “comes with music” devices later this year. It is also negotiating with other music labels besides the Universal Music.

I think every mobile phone owner would be willing to part with $100 to listen to unlimited music. There are billions of phones worldwide, and the music labels can easily earn large sums of money with the “unlimited music” model and will also help reduce music piracy.