Apple is holding talks with music labels that would let iPod and iPhone users pay extra for the hardware, but then feast on digital music at the company's iTunes store.

On reports of the all-you-can eat plan, shares of Apple edged down $0.82, or 0.6 percent, to $132 in late morning trading.

While Apple is offering $20 per device to the music labels, rival mobile phone maker Nokia is offering $80 for a similar unlimited listening plan for its "comes with the music" service, according to the report first published in The Financial Times. Apple did not respond to requests for comment.

Ingrid Ebeling, senior research analyst at JMP Securities, said Apple's 75 percent market share of the music player business gives it more leverage in negotiating a deal with music labels than No. 1 mobile phone maker Nokia, which already has reached agreement with Universal Music.

In August 2006, Nokia bulked up its digital distribution capabilities by buying Loudeye for $60 million.

Ms. Ebeling said music labels are negotiating from a position of both strength and weakness. Their strength, she said, is that they own all the content, but their weakness is a pattern of declining revenue over the past seven years.

"They're facing difficult times ahead."

Owners of iPods average only about 20 iTunes song downloads per device, Ms. Ebeling said, meaning that consumers are filling their devices with tracks ripped from their CD collections and illegal downloads.

Though consumers have shown a preference for owning their music and Real Networks' subscription service has been experiencing sluggish growth, she said Nokia and Apple likely will consider offering that kind of service as well.

"We'd expect they'd explore the subscription model and the all-you-can eat model," Ms. Ebeling said.