Apple is in talks with the largest record companies as it attempts to boost the iPhone's offering of ringtones and other musical content, according to a report in The New York Times.
Citing several unnamed music industry executives, the Times said that negotiations are "very active" and a final deal has not been set.
A final deal may come after June 9, when Apple CEO Steve Jobs speaks at the company's developer conference, the paper reported. That is when some expect Apple to announce the coming of the next-generation iPhone.
In addition to beefing up ringtones, Apple is also looking for rights to deliver songs from iTunes to iPhones over the cell phone broadband network, according to the Times. The labels are asking for more money for this kind of delivery, the paper reported.
Here's what the music labels are looking at: Apple is not only the country's biggest music retailer but is also becoming a force in mobile phones. If the record companies ask too much money for ringtones and other features, they risk losing sales to the growing number of iPhone owners.
Ringtones are a sweet deal for the labels because they typically are shorter versions of songs but retail for the same price--sometimes higher--of a full song.
But Apple is up against a determined group. The big music companies have signed a score of deals with other music retailers and cell phone companies. It's often written that the music industry doesn't want to be beholden to any one distributor. The top labels want greater flexibility with setting prices on iTunes.
If a deal can't be reached, Nokia and other cell phone makers could gain an important advantage over the iPhone.