The company recently with record labels for such a service, which would still take months to launch, wrote the paper, citing people familiar with the idea.

Streaming music services have been marked by failure due to difficulties in securing deals with record labels, high licensing costs and onerous restrictions on how content can be played or stored.

Apple officials could not be immediately reached late Thursday. The company has an event scheduled for Sept. 12 in San Francisco, where it is widely believed it will launch a new iPhone.

Both Pandora and Spotify offer a much more dynamic alternative to Apple's iTunes Store, which does not offer a streaming service and instead sells songs on an à la carte basis or entire albums.

Pandora, launched in 2000, lets users create up to 100 custom radio "stations" composed of music that is similar to an initial song selected by a user. Pandora does this by analyzing some 450 different characteristics of songs, which it calls the Music Genome Project.