If the rumors of discussions between Apple and the biggest record labels are true, then online radio could have itself a new player. Bloomberg reported [3] yesterday that the tech firm is planning to launch an Internet radio service as soon as the first quarter of next year, and the news sent Pandora stocks into a tailspin [4].

The app-based service will be ad-supported and this last thing is apparently what the talks are hinging on, with the music industry is hoping to take a percentage of the advertising revenue; Apple meanwhile, sees it as a way of growing its iAd business and is working out ways to integrate this with iTunes. The firm is also hoping to structure the business in a different way to Pandora's, which relies on a compulsory license. Instead, it will push for licensing pacts with the labels and a chance to get its hands on earlier music releases.