Google is in talks with music labels on plans for a download store and a digital song locker that would allow its mobile users to play songs wherever they are.

Google's Andy Rubin, the brains behind Google's Android mobile operating system, has been leading conversations with the labels about what a new Google music service would look like, according to these sources, who say the company wants the service up and running by Christmas.

The music industry hopes to benefit from a battle between Apple and Google as the technology giants go head-to-head in a wide range of media and consumer technology areas, including online TV and movies, mobile phones, software and advertising.

Finally here's an entity with the reach, resources and wherewithal to take on iTunes as a formidable competitor

Music is the latest flash point, although Apple has a major head-start on Google with its seven-year dominance through iTunes that accounts for 70% of all US digital music sales.

Google has yet to sign any licensing deals with major labels, the sources say, but it hasn't stopped the labels getting excited about the prospect.

“Finally here's an entity with the reach, resources and wherewithal to take on iTunes as a formidable competitor by tying it into search and Android mobile platform,” said one label executive who asked not to be identified. “What you'll have is a very powerful player in the market - that's good for the music business.”

Sales of Android-based phones have rocketed in recent months to 200,000 a day, according to Google, matching the hugely popular iPhones and iPads from Apple which are based on its iOS technology.

"There's no dearth of music available on a computer right now, but Google can still have an impact on the cellphone or any connected device," said Larry Kenswil, a former Universal Music executive.

The labels have been grateful to Apple for kick-starting digital music sales with iTunes in 2003, but they have been become increasingly concerned by the control the company exerts over everything from song pricing to digital formats.

Music executives believe having competing retailers could help expand the market, especially given the information base available to Google.

"Google has a wealth of data, from YouTube, as well as from search, that can inform on what people are consuming and looking for music wise," said Simon Wheeler, head of digital at London-based independent music company Beggars Banquet.

Music in the cloud

Connected devices like Apple's iPhone and Google's range of Android-based phones will be the next battlefield for music, say various industry watchers.

Labels have been hoping that the introduction of cloud-based music services from Apple and Google would be a major boost for convincing consumers who want to be able to access their music libraries, discover new songs and make impulse purchases wherever they have internet access.

Apple bought cloud-based music company LaLa Media last December and closed it in April, but any service based on the company's technology remains under wraps.

Perhaps not by coincidence Google also bought a remote media company - Simplify Media - in May and has also promptly closed it down. It has yet to announce any plans for the service.

"If they get it right it will hasten the transition by consumers from music you have to own to music you need ubiquitous access to," said Ted Cohen, a former EMI executive who runs TAG Strategic Partners.

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