Business

APPLE, LABELS PITCH ‘TONES

Steve Jobs is getting into the ringtones business, The Post has learned.

Apple is in the midst of developing an offering with the major music labels to sell ringers to iPhone users via iTunes, multiple sources familiar with the situation said.

The service – expected to be unveiled when Apple announces its new lineup of iPods – would allow users to turn almost any song sold through iTunes into a ringtone for an additional fee. The exact price was unclear.

Apple declined to comment.

One source suggested they will be marketed as enhanced downloads in much the same way Apple offers high-quality, unprotected music files from EMI. In that model, iTunes charges $1.29 for premium EMI tracks vs. 99 cents for standard song downloads.

Apple will also allow users to convert songs they have previously purchased through iTunes into a ringtone.

In a new twist, iPhone users will have the ability to choose any part of the song they want as their ringtone. Most major ringtone offerings from Verizon, AT&T or Sprint feature pre-determined samples.

For consumers who don’t want to design personalized ringtones, Apple will also sell traditional music ringtones.

Wireless carriers typically charge between $1.99 and $2.49 for ringtones.

The ringtones business represents an important new source of revenue for the music industry. U.S. ringtones revenues topped $600 million in 2006, up from $68 million in 2003, according to BMI, a collection society for songwriters and publishers.

Worldwide ringtones sales totaled $3.5 billion last year, according to London’s ARC Group, a research firm that tracks the telecom industry.

Apple is the leading retailer of digital music worldwide, selling more than 3 billion song downloads since the launch of iTunes in 2003.

Apple’s ringers are expected to be only compatible with the recently launched iPhone.

Jobs is forecasting that 1 million iPhones will be sold by the end of this quarter. He has also set a goal of selling 10 million phones by the end of 2008.

While most of the major labels are expected to participate in the offering, Universal Music Group, the world’s largest music company, will not.

Universal declined to comment.