Google Music service to launch before the New Year? Can it topple iTunes?

Google have been looking to get into digital music sales for a while now, first hinted at back in June. At that point it seemed quite a long way off into the distance, but now new reports are suggesting that it could be here in time for Christmas.

Google’s VP of engineering, Andy Rubin, is said to be in talks with record labels, trying to get the majors and their massive catalogues on-board, and talking about the most effective ways to present a cloud-based service. The service is expected to be tailored for mobile use, and will now likely launch alongside Android 3.0 (Gingerbread) in time for the winter holidays.

It’s also being touted as a potential iTunes killer, despite the fact that Apple’s digital shop still accounts for 70% of all digital music sales in the US.

“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 an anonymous label executive to Reuters.

“What you’ll have is a very powerful player in the market, and that’s good for the music business”.

The latest build of Apple’s iTunes (version 10) failed to impress after last week’s launch, as many had expected a cloud-based model to be introduced. The addition of the Ping social elements have also been met with widespread disinterest, with only 1 million of the 160 million iTunes users bothering to sign up for the free service in its first 48 live hours. Could Google be poised to topple the Cupertino kings, who have so far remained relatively unchallenged in the digital music sphere?

Google don’t have a great track-record when it comes to selling their own branded goods (take the Nexus One for example) but a robust cloud-based music service would certainly make people sit up and take notice.

What do you think? Can Google knock Apple off their perch, or are Apple’s music goods so ubiquitous now that they wont be able to compete? Or should we really be looking to Spotify, who have seemed one step ahead of the game since launching back in late 2008? Answers on a postcard…er….in the comments section below, or via our Twitter page, @techdigestnews .