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Monday, November 27, 2006, 07:00 am PT (10:00 am ET)

Beatles near iTunes deal, branded iPod possible

Apple Computer is reported to be closing in on a deal that would at long last bring the Beatles music catalog online and to its iTunes music service.

According to Fortune magazine, the two parties have momentarily pushed aside their differences and are currently in talks over making iTunes the exclusive online music store for the English rock group, at least for a limited time.

Word of the talks come on the heels of comments by David Munns, head of EMI North America, who recently told an industry conference that the Beatles would be available online "soon."

To date, the Beatles remain the most prestigious and highly acclaimed musical talent without a digital download presence, turning down earlier bids from Apple's iTunes and rivals such as Microsoft Charts and Real's Rhapsody.

If the latest round of discussions do bear fruition, Fortune claims EMI would serve as a peacemaker between Apple chief executive Steve Jobs — who is personally involved in the talks — and Neil Aspinall, the Beatles business interests manager under its rubric Apple Corps.

"Also being discussed is whether the band would be willing to take two steps at the same time and endorse the iPod by allowing its music to be used in a commercial," the report states.

Another scenario reportedly up for discussion is the prospect of the Beatles following U2's example with a branded iPod. However, Fortune notes that the "deal could well fall apart for any number of reasons," including the ongoing legal spat between Apple Corps and the Cupertino, Calif.-based iPod maker.

In the latest bout, Apple Corps earlier this year argued in front of London's High Court that the introduction of iTunes broke a $26 million, 15-year-old settlement under which Apple agreed to steer clear of the music business, for which the Beatles’ company retains the famous 'Apple' trademark.

In May, the court ruled in favor of Apple, saying its use of the Apple logo alongside the iTunes service was "fair and reasonable" and did not violate the 1991 agreement between the two companies. Apple Corps was ordered to foot Apple Computer's legal bill, estimated at £2m.

Apple Corps has appealed the case, in which a hearing is scheduled for next February.