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(Pocket-lint) - Apple is always working on something new - whether it's a car, watch, or music streaming service.

That last bit might confuse you, as the company already has the iTunes Store, iTunes Radio, and iTunes Match, so why would it need to launch another streaming service? Well, digital music sales are in the dumps, for one thing, while streaming is on the rise, and that means it's a prime market for Apple to tap into and dominate.

There's just one problem: the streaming market is already being ruled by Spotify. Apple isn't sweating that, though, because it acquired Beats Music last year and reportedly plans to relaunch it soon as a Spotify killer.

Did Apple acquire Beats for headphones or Beats Music?

Apple bought Beats for $3 billion in 2014, but before the purchase was final, analysts began speculating that Apple was more interested in streaming music than Beats headphones.

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Digital album sales dilemma

It's no secret that digital album sales in iTunes are steadily dropping. Eddy Cue, Apple’s senior vice president of internet software, told a crowd at Code Conference that "music is dying in the way that we've known it", and that "it hasn't been growing in the way that we all want it to".

Streaming music sales, however, are growing. According to a report from venture capital firm Kleiner Perkins Caufield & Byers, streaming sales spiked 32 per cent in 2013. And when you think of streaming music, the first thing that probably comes to mind is Spotify. The service most recently claimed to have more than 15 million paid subscribers.

In a report largely about how iTunes' digital music sales have slumped roughly 14 per cent worldwide since last year, the Wall Street Journal claimed that Apple bought Beats Music to stem those losses. Apple allegedly wants to relaunch Beats Music, which costs $10 a month per subscription, as part of iTunes in 2015.

Competing with Spotify

Apple likely thought it could successfully tackle streaming by acquiring Beats and building a Spotify competitor. Tim Cook, Apple's CEO, even told Re/code that Beats would provide Apple with a "head start". The audio company was full of "incredible people," he added, and that's the thing Apple needs to do streaming successfully.

While all that sounds nice and sweet, Cook neglected to mention the logistical reasons as to why Apple would want Beats, which already had its own streaming music service. Although Apple has global licenses for iTunes Radio and iTunes, for instance, it got more through Beats Music, and that certainly sweetens the deal.

The Beats Music infrastructure also has a delivery system that can be folded into iTunes, and the result would be different than iTunes Radio (because iTunes Radio is a non-interactive streaming service much like radio rather than like Spotify). Beats Music further has a catalogue of high-res music that can compete with Spotify.

Apple would of course have to convince users to pay up. Spotify is partly synonymous with streaming music because it offers a free, ad-supported option, but at the moment, Beats Music doesn't offer such a plan.

So, yeah, it's safe to say Apple didn't want Beats just for its colourful and overpriced headphones.

How might the new Beats Music work?

It looks like Apple will do something with Beats Music streaming. The company has decided to build a new streaming service, with features, functionality, and technology pulled from Beats Music, it's claimed.

9to5Mac reported that Apple's new music streaming service is based on cloud streaming, will be a paid service, has yet to be named, and is centered around your music library. There's also a new search feature that'll find songs in iTunes and Beats' catalogues, allowing you to either stream the tune, add it to your personal library, or store it on your device.

Beats Music's Playlists, Activities, and Mixes features are expected to be integrated into Apple's new music service. Apple even wants to fully integrate Beats Music into iOS, iTunes, and Apple TV. It is developing a "Beats-infused" version of the Music app for iPhone, iPad, and iPod Touch, along with a new iTunes app for computers and a new Apple TV app.

Apple has decided to develop its first Android app too. The music streaming service will therefore be available to people outside of the iOS ecosystem, much like Beats Music. The service will also take advantage of Beats’ social networking features, allowing you to follow other users and artists, which sounds reminiscent of Apple's failed Ping social network.

Apple will also let you merge existing Beats Music accounts with your iTunes/Apple ID profiles and migrate your Beats libraries to the new service, meaning your Beats Music songs will join your iTunes in the Cloud content.

Keep in mind the new music service will feature Apple's interface design instead of Beats' black and red colour scheme. The company wants to maintain consistency across iTunes and the iOS Music app. It also doesn't plan to change iTunes Match, iTunes Radio, or iTunes Store at all.

Is Zane Lowe involved at all?

Zane Lowe, the BBC Radio 1 DJ, has announced that he will leave the BBC in March to join Apple. Lowe, who has been with the BBC for 12 years, currently hosts a number of shows at the station, but is giving all that up to relocate to Cupertino with his family. Apple hasn't said what the DJ will be doing at the company.

Reports however have claimed Lowe will join the company's iTunes Radio division helping to curate music for its subscribers. iTunes Radio has struggled to make an impact in the US against other services like Spotify, so Lowe could be part of a fresh attack to make it more relevant, but there could also be a host of other jobs to fill.

Lowe's ability to find acts and discover new music is a brilliant asset, for instance, and one that Apple will enjoy as his new employer. Add that to his ability to present an incredibly popular radio show means he has an eye for what people want. Expand that out to Apple's newly acquired Beats offering - and guiding Apple to success will be easy.

And what about Kanye West and Taylor Swift?

According to The New York Times' T Magazine, Kanye West said he passed on a "multimillion-dollar partnership with Apple." Many reports are assuming West was given a chance to exclusively launch his music on the new Beats Music. It's also been suggested that Beats' Iovine pitched the same deal to other artists who went on to co-found Tidal.

As for Taylor Swift, Bloomberg said Apple has been approaching artists like Swift, Florence and the Machine, and others, in an attempt to secure exclusive streaming rights for the new Beats Music. West said his potential partnership with the company was worth millions, and that might be true if you look at what Tidal is paying.

Tidal is reportedly offering its artists up to $3 million and 3 per cent of the company - as long as they give their support and exclusive content to Tidal.

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When will the new music service launch?

According to Billboard, Apple's upcoming streaming service might launch in the spring, but it'll definitely release by summertime. If it launches in the summer, you could expect a release date around WWDC 2015.

9to5Mac claimed software update iOS 8.4 would add the music service to iPhone, thus allowing iPhone owners to listen to on-demand, premium music straightaway without having to download a standalone app.

9to5Mac also recently claimed that Apple might unveil the Beats-like music streaming service in beta form at the Worldwide Developers Conference in early June. The delay is reportedly due to the departure of key employees and difficulty with integrating Beats' human and technology resources into Apple.

It's been claimed that Apple has decided to develop its first Android app. The Beats-like music streaming service will therefore be available to people outside of the iOS ecosystem, much like Beats Music. 9to5Mac said that some of Apple's Android developers have left the company, so the delay could also involve the new Android app not being ready in time.

Whatever the reason might be, it looks like we'll have to wait until June, though it's possible that the service might instead be bundled into iOS 9 this autumn. The service will be integrated into the standard iOS Music application, with functionality similar to Beats Music for iPhone, and it will be integrated into iTunes on the Mac and Apple TV.

UPDATE: Bloomberg said Beats Music will be retooled and re-launched this summer with a new name, and it'll cost $9.99 a month for individuals or $14.99 a month as part of a family plan.

How much will it cost?

You can expect Apple's new streaming service to cost at least $7.99 per month.

And that's it.

Keep checking back for all the latest, as we plan to update this story regularly.

Writing by Elyse Betters. Originally published on 14 February 2015.