Erstwhile semi-official leak source the Wall Street Journal is reporting that Apple's been busy talking licenses with the record labels so it can set up a "custom-radio service" that's very much in the mold of Pandora. Unlike iTunes, which can play playlists the user creates, or which Apple's Genius algorithm fashions based on a user's music tastes, Pandora delivers music through "stations" which stream music continuously as if you were listening to the radio, with stations shaped by a song or artist the user chooses.
The WSJ says the system will work on Macs and iDevices, and hints that it may incorporate advertising in order to be available for free to end-users.
Apple's been continuously expanding iTunes over the years, most recently moving to a semi-streaming model with iCloud, and has also flirted with digital advertising via its iAd system. It's also said, separately, that Apple talks with TV content owners and distributors--aimed at an upcoming Apple television push--have stalled.
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