Amazon up with rumours of iTunes challenge

Amazon shows a strong start to the year with whispers it may challenge Apple's iTunes

25 April 2007 10:17 GMT / By Ryan Haynes

End of last week Google announced its massive profits, now Amazon is showing off its start to the year.

Amazon experienced a strong start to 2007, with sales rising 32% in the first 3 months of the year. Pre-tax profits were up by $48 million to $144m compared to $96m a year ago.

Amazon said it had seen strong demand in all major regions, with sales in the US and Canada up 30% and returns from Asia and Europe ahead by 35%. The retailer expects sales and profit growth to slow in the second quarter of 2007.

Analysts expected the company to earn 15 cents a share in this quarter, but they out done this by gaining 26 cents a share.

While all the finances were being bounded about, rumours hit the mill that the online retailer is expected to launch its own version of iTunes.

The music download service is reported to be launched as soon as the next two months, offering all the music it sells in the unrestricted MP3 format. All downloads will be DRM free.

Amazon has apparently made contact with all four major labels to propose such a service within the last fortnight, reports claim.

We will keep you posted.