Will Apple implement a "pay one price for unlimited music downloads from iTunes" surcharge option for new iPod / iPhone purchases before July 4?

Apple Mulls Unlimited Music Bundle

Apple is in discussions with the big music companies about a radical new business model that would give customers free access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices.

The “all you can eat” model, a replica of Nokia’s “comes with music” deal with Universal Music last December, could provide the struggling recorded music industry with a much-needed fillip, and drive demand for a new generation of Apple’s hardware.

This latest concept is similar to Nokia's "Comes With Music" program set to launch later this year. Nokia is reportedly rolling an $80 fee into the price of compatible phones for one year of access to Nokia's music store, which includes music from labels like Universal.

Apple's plan is different in several respects. Since the average iPod owner buys about 20 tracks from the iTunes, Apple wants to make the premium about $20, arguing that it should cover the average consumer's downloads. Then the owner can make unlimited music downloads from the iTunes Store for the life of the device. Once downloaded, the tracks are yours to keep, even if you get rid of the original iPod or iPhone. And since iPod and phone owners tend to replace devices fairly regularly, the record labels would be getting the fee whether or not the consumer makes any further downloads. Silicon Alley Insider did the math and thinks it's a good deal all around. But according to the Financial Times' sources, the labels are looking for numbers closer to the $80 Nokia is reported to be paying.

There's still the question of DRM, however. Even though the tracks are yours, any non-iTunes Plus tracks will still be beholden to FairPlay restrictions, so this could also be a good way to lock consumers into repeat Apple purchases (unless they're willing to have their music tethered to their computers).