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BREAKING: GOOGLE & APPLE TO BE AT FULL-ON MUSIC SPACE WAR BY CHRISTMAS…


Reuters:

* Labels eager for Google-Apple battle

* Google mulling download store, song locker service

* Google’s talks with labels led by Android founder Rubin

* Labels see cloud-based music services from Apple, Google

* Google, Apple shares up in afternoon trading (Adds Google spokesman, stock prices)

Google Inc (GOOG.O) 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 as it steps up its rivalry with Apple Inc (AAPL.O), according to people familiar with the matter.

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.

Rubin, Google’s vice president of engineering, hopes to have the service up and running by Christmas, two of these people said.

The music industry hopes to benefit from a battle for control of the mobile phone and computer desktop between Apple and Google as both 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 even advertising.

L.A. TImes:

Google Inc., which is developing a digital music service, is finding a warm welcome at record companies that are hoping the technology company can loosen Apple Inc.’s grip on the digital music market with its iTunes music store.

The talks center on securing a sweeping set of licenses that would give Google the latitude to offer an array of products and services through its Android operating system for mobile phones as well as through computer browsers, said executives familiar with the discussions.

Music companies have all but rolled out the red carpet for Google, believing that the Mountain View, Calif., technology giant can serve as a counterweight against Apple, which controls more than 80% of digital music sales via its iTunes store. Though record companies collect 70% of the revenue generated by iTunes, they have bristled under Apple’s terms, which have in the past limited the prices music companies can charge, among other things….

With Android phone sales outpacing iPhone sales in the first half of the year, Google is in a position to bring millions of potential customers to the table. About 7.6 million subscribers in the U.S. had Android phones at the end of June, compared with 12.4 million iPhones, according to ComScore Inc., a market research firm.

Electronista:

The strategy rumored in the past would focus on streaming and would be tailored primarily to Android devices; it may or may not be an unlimited plan but could give users access to their music collections on phones and tablets by streaming instead of downloads. Google bought Simplify Media in the spring with what many believe is the intent to create a “locker” for someone’s music collection and grant access over 3G or Wi-Fi.

It might use Google’s current support for music previews and store links in its search results to help drive sales and could also use YouTube to its advantage by popping up ads and suggestions to buy from its own stora rather than using sources like Amazon MP3 or iTunes.

Computer World:

Steve Job took time from his Apple TV and iPod announcement yesterday to take aim at Google and Android, saying that that Apple was activating 230,000 devices a day, and adding “We think some of our friends are counting upgrades in their numbers.” Google disagrees. Who’s right here?

Jobs was slightly coy with his accusation, not directly naming Android. But there’s no doubt that was his target, espeically because he was in the process of announcing the 230,000 device-a-day figure, and Google had recently said it was activating 200,000 devices a day.

Google quickly responded to the Google accusation, telling Seth Weintraub at Fortune, “The Android activation numbers do not include upgrades and are, in fact, only a portion of the Android devices in the market since we only include devices that have Google services.”

That would mean that the 200,000 number is an underestimate of the total number of Android devices activated a day.