Apple closes Lala amid iStreaming rumours

Apple is to close the doors on Lala, the streaming music service it bought at the end of last year, amid speculation that it plans to launch a streaming version of its iTunes service.

The move comes as streaming music services are enjoying a boom. UK-based site Spotify recently introduced tools to allow users to share playlists, in a bid to cash in on the rise of social networking. Fellow Brit site we7 last week announced it was the first on-demand service to cover the cost of its content through advertising.

Lala’s closure, which the web site's home page reports will happen on 31 May, further raises speculation that has raged since the company was acquired, that Apple is set to launch a streaming iTunes service.

"Whatever they bought Lala for, it is likely to be integrated into iTunes," Michael Gartenberg, a partner at technology consulting firm Altimeter Group, told the Press Association. "It's no surprise they're shutting this down."

Sources point to the $1 billion data centre Apple is building in Maiden, North Carolina, which some believe will be used to launch an on-demand service that does away with the need to download tunes.

Some commentators anticipate the announcement of such a service on 7 June at WWDC, the developers’ conference Apple traditionally uses as a platform to debut big developments.

The PA report suggests such a move may still be a little way off, though. Apple would need some time to set up the licences it needs to create a streaming service – and record company contacts indicate these aren’t yet in place.