iTunes costs slashed to 59p under price war pressure

BOSSES at Apple have announced a major shake-up for music downloaders with plans to sell songs for as little as 59p.

At present, the company's iTunes has a one-price-fits-all strategy of 79p with no subscription fee, but the new model will have a varied pricing structure, with what the company calls "better quality iTunes Plus" costing more.

From April, it will offer a three-tier price system with the cheapest tracks cut by 20p while others will cost either 79p or 99p depending on how much US music labels charge.

Apple has been under pressure to cut prices after Amazon and play.com launched a price war by starting their own music download services.

From today, all of the 10 million tracks will be available on a new format which will be compatible with all music players.

Previously, most music from the iTunes store could only be played through an iTunes interface or iPod.

But an agreement with Sony BMG, Universal, and Warner Music will end digital rights management (DRM) software currently attached to iTunes.

In 2007 Apple's CEO, Steve Jobs, published an open letter called Thoughts On Music in which he called on the three big record companies to ditch DRM.