Apple Computer has announced that its iTunes online music store has sold more than 500 million songs since its inception over two years ago and expects to sell its billionth song by the end of December.

With Apple's iPod offering music and photo capabilities, speculation is rife that the company maybe on the verge of releasing a video-playing version of its iPod. The company reportedly held discussions with major recording companies seeking to license music videos to sell through iTunes.

According to reports the Apple video iPod might be unveiled by September and that the videos might cost around $1.99 each on iTunes save for the possibility of a discount, if consumers were to buy a music video and a song at the same time.

When iTunes was launched, 4 bands - Gorillaz, Morcheeba, Dave Matthews Band and Thievery Corporation provided music videos. The number of bands have since increased to 16. The iTunes store also promotes movie trailers from new films and DVDs.

With owners already using the iPod for more than just listening to music, analysts hail music videos as a natural next step for Apple, which can tap into its huge base of music lovers. They place a premium on Apple's strength in terms of video software such as the Quicktime movie format, video-editing software, Final Cut Pro and iMovie.