If the CNET report is true, Apple only needs to close deals with Sony Music Entertainment and Universal Music Group now before it secures unprecedented, legitimate access to music from all "Big Four" labels.
In March, Amazon launched its cloud music locker without such rights and faced threats of legal action; it is now reportedly in talks with the labels to secure licensing agreements.
In April, CNET reported that Apple had inked a deal with Warner Music and "at least one of the remaining three" major music labels. Apple has not officially acknowledged the development of a cloud-based music storage service, but speculation is rife after reports "confirming" the development with unnamed sources. Furthermore, the company recently built a massive data center in North Carolina, reportedly meant to host a video streaming service.
On top of this, an Apple patent filed Thursday has sparked rumors of how such Apple's cloud music locker could sync up to iTunes. The application for "Local Storage of a Portion of Streamed Media" seeks a patent for locally storing clips of songs on a music player. Then while the snippets are being played back, the music device would "retrieve the remaining segments of the media item from the user's media library as a media stream over a communications network." In other words, you iPod would only store lightweight clips from songs while a remote server would store the full-length versions.
Although the patent itself is only for the local storage of media clips, Apple wrote in the summary that a user's library of full-length songs "can be stored on any suitable device, including for example on a host device, on a remotely accessed server, in a cloud, or in any other suitable location."