Pandora May See Major Challenge from Apple in 2013

Apple is rumored to be in high-level talks with executives from music’s biggest labels this week as the Mac-maker aims to launch a dedicated digital radio service sometime during the first quarter of 2013.

Sources speaking in confidence with Bloomberg admit that the project has been in the works for some time and is getting incrementally closer to finally happening.

Talks are centered in part around how to share ad revenue and a deal could be reached by mid-November, with Apple starting a service within the first three months of 2013, said the people, who asked not to be named because discussions are still in progress.

In recent days, it is alleged that executives from Universal Music Group, Warner Music Group, and Sony Corp.’s music division have all met with Apple’s power players at Apple headquarters in Cupertino, California.

“Radio is a natural step for Apple,” says Rich Greenfield, an analyst with BTIG LLC. “This helps Apple dominate in cars, where people listen to an average of two hours of radio a day.”