Apple (Nasdaq: AAPL), the world's most valuable technology company, may change the way iTunes works so that it's more closely integrated with the iCloud file-storage service, news services said.

The goal would be to streamline iTunes, which already contains more than 28 million songs and 45,000 movies, with more home services, allowing Apple users to better manage their entertainment offerings.

The Cupertino, Calif., company may announce the move in the second half, to meet new competition from rivals such as Google (Nasdaq: GOOG), the No 1 search engine which will start selling its Nexus 7 tablet and Nexus Q home media controller next month.

The Apple move also would compete against Inc. (Nasdaq: AMZN), the No. 1 e-retailer, which has sold more than 6 million Kindle Fire tablets equipped to operate with its Amazon Prime entertainment offerings, since November.

Apple officials declined comment .

iTunes is a small part of Apple's quarterly revenue  -- only $1.9 billion of the $39.2 billion in the most recent quarter - but crucial to making Apple products sticky with consumers.

Apple users also use the iCloud to reach the App Store, where there are already more than 650,000 applications available to download for iPod, iPhone and iPads.

This week, Apple expanded access to iTunes to 12 more countries in Asia including Hong Kong, Taiwan, Thailand, Malaysia and Singapore but not China and India.

Apple shares fell $5.45  to $569.05 in Thursday trading. Google shares fell $4.99 to $564.31.