iLounge

Amazon.com is planning to launch a digital music service and Amazon-branded MP3 players, according to a report by the Wall Street Journal. The online retailer is currently finalizing deals with the major music companies and could launch the service and portable devices as soon as this summer.

“Amazon is in advanced talks with the four global music companies about a digital-music service with a range of features designed to set it apart,” reports the Journal. “Among them: Amazon-branded portable music players, designed and built for the retailer, and a subscription service that would deeply discount and preload those devices with songs, not unlike mobile phones that are included with subscription plans as part of the deal.”

The article claims that music executives “privately welcome Amazon’s plans, which they see as one of the only credible challenges to Apple’s hegemony in both digital music and portable players. Now the question is whether Amazon’s massive customer base is enough to offset a long delay in entering the online music business.”

“Amazon’s online music plans would take advantage of the company’s strong position in selling CDs and portable music players,” the Journal notes. “The online retailer sells an estimated 10% of digital music players in the U.S., including iPods, and the pending deal could hurt its relationship with Apple. If Amazon’s competing offering presented enough of a threat, Apple could even stop selling iPods on the site.”