Will Apple and Universal Sever Digital Music Ties?

July 3rd, 2007

While Apple’s iPhone division basks in the glory of the media spotlight, the Mac-maker’s iTunes division is baring the brunt of some potentially game-changing news.News reports claim that ongoing tension between Apple and Vivendi SA’s Universal Music Group could lead the latter not to renew its long-term contract to sell digital music downloads at the iTunes store. Other reports indicate that Universal is merely considering the notion.

Neither Apple nor Universal could immediately be reached for comment, but industry analysts said there’s too much at stake for both sides not to continue discussions. “I can’t see how it would be to either company’s advantage not to maintain this relationship,” said Tim Deal, a senior analyst with Pike & Fischer. “I’d be hard pressed to think the companies wouldn’t resolve these issues.”

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