The Financial Times reported today that Apple is in discussions with the major labels to sell iPods and iPhones that come with unlimited access to iTunes music. Consumers would pay a one-time surcharge when they buy the device, and would be able to download as music as they want for the life of the iPod or iPhone. It's similar to a deal that Nokia worked out with Universal Music Group last year, to sell its phones with unlimited access to Universal tunes for an $80 premium. According to FT's sources, the Apple deal is being held up by negotiations over how much to charge for the access: Apple wants to keep the charge as low as $20, while the labels presumably want something closer to the Nokia deal.
The deal sounds a lot like the subscription model already available from Rhapsody, Napster and others, which Apple CEO Steve Jobs has long said does not work: "The subscription model has failed so far," he was quoted as saying last May. "Never say never, but customers don't seem to be interested in it." If Apple was able to offer unlimited access to iTunes music for a $20 extra charge, it's hard to imagine many consumers not being interested in it.