Apple has signed a cloud licensing agreement with EMI Music and is close to similar deals with Universal Music Group and Sony Music Entertainment, according to US reports.
Earlier reports claim Apple has also reached an agreement with Warner Music Group for an iTunes cloud service.
But Google and Amazon launched their music services without renegotiating licenses, which means Google's service is unable to sell music and Amazon faces a possible backlash from rights holders, according to AppleInsider.
The report says Apple is likely to call the new service 'iCloud' and will provide not only music, but also storage of contacts, calendars, photos and video.
Apple is said to have purchased the iCloud.com domain for an estimated $4.5m from the Swedish company Xcerion.