MUSIC DOWNLOADS: IS THE PRICE RIGHT?

Apple is none-too-pleased with the prospect of having to pay higher royalties for music.

Publicly, Apple has railed against the prospect of a fee increase. During a 10-month trial that concluded earlier this year, Apple executive Eddy Cue claimed that a rate increase could narrow already thin margins and that the company "would not continue to operate [the iTunes Music Store] if it were no longer possible to do so profitably." The testimony fueled worry that iTunes, whose downloads have helped drive sales of iPods and iPhones, would shut down or drastically change its business model if a royalty increase comes down the pike.

If royalties are increased, Apple is unlikely to change its tune on what it charges per download. CEO Steve Jobs has adamantly clung to the 99¢-a-song price tag. And even if Apple eventually coughs up a few pennies a song, the company's bottom line won't take a big hit, says Trip Chowdhry, an analyst at Global Equities Research. The iTunes Music Store accounts for less than 5% of Apple's sales and just a sliver of earnings.