Amazon has revealed plans to launch its own DRM-free music download store, in what many will see as a direct challenge to Apple’s iTunes. By selling tracks in the mp3 format — without copyright protection — music from Amazon will be compatible with almost any digital music device including cell-phones, streaming media boxes, and mp3 players such as Apple’s very own iPod.

Amazon’s catalogue will initially comprise of music from the third largest record company, EMI, and thousands of smaller labels. Along with Apple, who also recently starting selling DRM-free music, Amazon’s clout should help pile on more pressure for the other major record labels to follow suit and embrace the mp3 format.

As the Financial Times points out:

The web-based retailer’s decision to enter the digital music market comes at a time when the record companies are desperate for a rival to iTunes. In spite of challenges from Microsoft, Yahoo and others, the Apple service still commands roughly 80 per cent of the online music market, which has allowed it to dictate terms to the music companies on pricing and other issues.

Amazon has said that the service will debut later this year, but hasn’t revealed details on pricing, except to say it will be “competitive”.