UK-based digital download store 7digital.com revealed yesterday that Sony BMG, a division of Sony Corporation (NYSE: SNE), had joined the other major music labels to offer high-quality MP3 files without anti-piracy technology from the store. The new deal brings 250,000 tracks to the format, making 7digital the largest digital rights management (anti-piracy technology)-free store in the UK with 4 million tracks offered. 7digital also launched new sites in other regions of Europe, and announced plans to launch a store in North America by the end of the year. CEO Ben Drury told Billboard that the U.S. store will be managed from an office in San Francisco.

Opening a store like 7digital, where music fans can purchase high-quality MP3 tracks from all the major labels would be a strong challenge to the dominance of Apple Inc. (NASDAQ: AAPL)'s iTunes Store in the United States. Drury told Billboard as well that consumers are more likely to buy MP3 formatted albums over the DRM albums generally offered in stores like iTunes and that the average "transaction" on 7digital' site is around $8. The CEO also welcomes the pending launch of a MP3 store by Amazon.com Inc. (NASDAQ: AMZN) in the United Kingdom, since it will promote and provide more choice to consumers looking at formats without DRM and stores without subscriptions.

High quality DRM-free MP3 files work on across all platforms and devices, meaning that consumers that do not own Apple's iPod can buy tracks for other devices. Overall a U.S. 7digital store would be a true competitor for iTunes and could boost the music labels if prices drop and more digital tracks are bought as the CD slowly declines.

Apple, Inc. (Nasdaq: AAPL) and Amazon.com, Inc. (Nasdaq: AMZN) have been hot companies and, yes, hot stocks. But the two companies are taking shots at each other.

Of course, as was expected, Amazon.com launched its digital music store, which has about 2.3 million songs. But as the company is wont to do, it has engaged in some price cutting. For example, a song costs between 89 cents to 99 cents. An album goes for $5.99 to $9.99.

Well, to get some analysis on this, I turned to Rafi Mohammed, who is an expert on pricing. He operates Pricing for Profit and is also the author of the book, the Art of Pricing. According to him:

"Amazon's entry into the digital music market will significantly affect Apple. Drawn by steep discounts, many music aficionados will switch to Amazon's service. This will inject some much needed competition into the digital music market, which will help music companies gain negotiating power. Additionally, a strong iTunes competitor may offer co-branding opportunities for music device makers. My prediction: this is the catalyst to music companies moving to their beloved variable pricing (some prices higher than others) model and new digital music players that will successfully challenge Apple's iPod."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.