SAN FRANCISCO ? (UPDATE) Internet retail titan Amazon has ramped up its attack on Apple's iTunes by having links to its MP3 online music and movie store built into a "Google phone" due out next month.

Contrary to the way things are done at iTunes, digital music sold at Amazon MP3 store isn't shackled with digital rights management (DRM) software that prevents people from copying tunes or moving them between devices.

"Amazon arguably has the best DRM-free music service out there and it is a coup that Google got them," said analyst Rob Enderle of Enderle Group in Silicon Valley.

"It is very aggressive. They are seriously targeting Apple. They want to break that monopoly Apple has with iTunes."

Apple's chief executive Steve Jobs has cited industry statistics saying that iTunes is the largest music seller in the world.

Amazon MP3 launched a year ago with an online music catalogue listing more than two million songs from more than 180,000 artists and 20,000 labels, including EMI Music and Universal Music Group.

Songs are priced from $0.89 to $0.99 and albums are priced from $1.99 to $9.99.

Amazon's music download store is similar to offerings from Apple, Real Networks, and retail behemoth Wal-Mart.

Amazon boasts that MP3 store tunes can be played "on virtually any personal digital music-capable device," including Apple's iPods and iPhones and Microsoft's Zune line of players.

Amazon MP3 "turns up the heat on iTunes" while boosting an MP3 audio format compatible with most music players, Lazard Capital Markets analyst Colin Sebastian said when the online shop debuted in September of 2007.

Meanwhile, Internet search leader Google took a giant leap into the mobile phone market on Tuesday, unveiling a handset developed with telecom carrier T-Mobile to compete with Apple's hot-selling iPhone.

The T-Mobile G1, the first mobile device powered by Google's open-source Android software, will be available in stores in the United States on October 22 and will cost $179.

T-Mobile chief technology and innovation officer Cole Brodman called the G1, built by the Taiwanese firm HTC, a "game-changing" device which will "power a new mobile Internet of the future."

The G1 will go on sale in Britain in early November and in other European countries served by T-Mobile, a subsidiary of Germany's Deutsche Telekom AG, in early 2009.

Amazon's escalated attack on iTunes' mainstay, digital music, comes just weeks after the Seattle-based firm enhanced its UnBox service to offer on-demand streaming of ad-free films and television shows.

The improved service, which competes with iTunes digital video rentals and sales, lets people watch programs or movies instantly in Web browsers or download them to watch on home computers whenever they wish.

"We're continuing to create new, convenient ways for our customers to watch digital movies and TV shows," Amazon Video On Demand directory Roy Price said in a release.

"The ability to watch content instantly without downloading first was among the most requested features of our customers."