Apple plans to upgrade their users almost overnight to a cloud music service in an ambitious move to beat Amazon and others. Record labels are wary to give Apple even greater dominance, which is why Apple's strategy is designed to sidestep new licenses from the major labels.
Lala's acquisition value is not the licenses or the 10 cent song rental model. It's the personal music storage service. Lala's upload technology will be bundled into a future iTunes upgrade, automatically installed for 100+ million users. After installation, iTunes will push their entire media library to a personal mobile iTunes area.
Since media will be supplied from the user's personal collection, Apple is freed from the hassles of device and region limitations. Purchases still download, but once downloaded they'll automatically be loaded to mobile iTunes for anywhere access. Because users are in possession of the materials, no new licenses are required from record labels.
--MR
