Update: US satellite radio takes on iTunes

US company Broadband Instruments has just launched a new digital music service that aims to compete with both iTunes and the iPod , but also with US-based digital satellite radio services too.

The service - called Slacker - currently comprises an internet music service and a browser-based audio player that gives users free access to 10,000 internet radio stations - the only catch is that the service is currently supported by ads. Slacker classifies its radio stations by artist and genre, plus you can also create your own custom playlists by choosing your favourite tracks. So far, so ordinary in a way.

The big change will come when Broadband Instruments offers Slacker as a downloadable application like iTunes, and teams with it the Slacker digital media player. This features a 4-inch colour LCD, built-in Wi-Fi and offers support for Broadband Instruments' mobile phone services as well.

The company also plans to offer in-car radio receivers that tunes into stations on Broadband Instruments' satellite radio service. The head units will come with built-in storage so you can continue to listen to music even if the satellite signal is interrupted.

Keen pricing is key?

The other key component is the price. Broadband plans to offer two flavours of Slacker in the long term - one that's free, but supported by ads; and a second that's ad-free but costs $7.50 (£3.88) per month to subscribe to.

Even if it doesn't manage to mount a challenge to the iPod/iTunes monopoly, Slacker could still trouble US satellite radio networks Sirius and XM Radio . Both currently charge around $13 (£6.73) per month subscriptions, but are still losing massive amounts of cash. They're hoping to merge to deliver a more compelling proposition to listeners, but t heir merger has to be agreed by US regulators. The launch of Slacker could actually help their case.