Will Amazon challenge Apple?

I always find rumors in the tech industry interesting, not necessarily because the rumors are always valid but because it's nice to speculate. What if somebody could provide substantial competition for these companies that own these tech markets? Unfortunately, the only companies that seem to be capable of standing up to these big corporations are other corporate giants, and I've managed to find another example of this. This time there are reports of Amazon challenging what has become Apple's bread-and-butter product, the iPod.

Reports originating from the Wall Street Journal say that Amazon is talking with record labels about launching a digital music service including a digital media player. Rumors also include that geeks have already dubbed this new product the Apod and think that Amazon will try to enter the market by offering lower prices. Amazon, of course, refuses to comment on the deal. Personally, I find this report rather interesting, especially since customers can already purchase mp3 players from Amazon's electronics store, including the iPod.

Will any of this materialize? And if it does, what would it accomplish other than possibly forcing Apple to reduce their prices? I suppose we'll just have to wait and see.