Via Bloomberg/Allindstrom

Apple Inc. (AAPL) plans an overhaul of iTunes that would mark one of the largest changes to the world’s biggest music store since its 2003 debut, according to people with direct knowledge of the matter.

Apple will unveil the changes by year’s end, said the people, who asked not to be identified because the plans aren’t public. The company will more closely integrate its iCloud file- storage service with iTunes so users can more seamlessly access and manage their music, videos and downloaded software apps across different Apple gadgets, the people said. Apple also plans new features for sharing music, the people said.

Tom Neumayr, a spokesman for Cupertino, California-based Apple, declined to comment.
Apple’s iTunes Store has more than 28 million songs and 45,000 movies. It also houses the App Store, which offers more than 650,000 applications that can be downloaded for the iPhone, iPad and iPod Touch devices.
Discovering Content

With an increasing amount of content available on the store, the overhaul is intended to improve how people manage all their files, one person said. That includes changes to how users find new material and how they access what they already own on different Apple devices, said one person.

One of the main ways Apple will attempt to improve discovery is by making it easier for people to share songs, a popular feature of Spotify Ltd.’s music-subscription service. Apple has been negotiating with major record labels for rights that would let a user listen to a song sent to them from a friend for free, one person said.
Apple also has announced tighter integration of social networks Facebook Inc. and Twitter Inc. in iTunes, allowing people to share what they are listening to.
Apple co-founder Steve Jobs, who died in October, often spoke about making Apple the “digital hub” in people’s lives. ITunes has been the critical product to fill that role, starting with music sales and expanding to movies and TV shows.

ICloud Integration

Customers also use the software to activate and update iPhones, iPads and iPods, as well as to synchronize their libraries of music, videos, photos and applications. Yet as more content is being stored on people’s mobile devices, organizing all that material has become increasingly difficult. The further integration of the iCloud Internet-based storage service is aimed at fixing some of those problems, according to the people familiar with the changes.

Apple is creating separate applications for features that had been included within iTunes. Podcasts now are a separate app on iPhones, iPads and iPod Touch devices, instead of being part of the iTunes app.

To add more multimedia features to iTunes, Apple has been asking music labels for more band photos and videos that can be included, one person said.

ITunes also is part of Apple’s plans to expand in Asia. The company this week announced that it will be opening the digital store in Hong Kong, Singapore, Taiwan and nine other markets in Asia.

Music labels also have been urging Apple to offer a music- subscription service similar to Spotify’s, so customers could pay a monthly fee to get unlimited access to songs, said one person familiar with the matter. Still, Apple isn’t likely to announce that type of service, another person said.

Apple’s shares fell 0.5 percent to $571.79 at 9:33 a.m. in New York. Through yesterday, the stock had increased 42 percent this year.