Recent reports have speculated that Apple’s upcoming cloud-based music service is nearing completion as the company signs off its final deals with four major record labels. When the service does launch, however, it won’t be free of charge. According to music industry insiders speaking to CNET, while there may be an initial free period, users who wish to continue using the service will be charged an annual fee.

The CNET report notes a recent rumor claiming Apple may charge $20 a year for the service, but they couldn’t confirm with sources whether this figure was accurate. A similar service from Google is also expected to come with an annual fee.

Apple’s cloud-based music service will allow users to store their music and videos in a digital ‘locker’, enabling them to stream the content to internet connected devices, such as the iPhone and iPad – negating the need for content to be stored locally on the device taking up valuable storage space.

The service was expected to come as part of a MobileMe revamp, which would provide users with certain aspects of cloud storage as part of their subscription – just like iDisk. However, it’s now unclear whether the two services will be separate entities, or whether the annual fee could also incorporate the MobileMe subscription.

While Apple has informed music executives that work on the service is now “complete,” it has apparently only provided a broad description on how the service will work, keeping the specifics under wraps.

Meanwhile, Amazon recently rolled out its own cloud-based digital storage service called Cloud Drive. The product offers 5GB of storage for free and then tiered subscriptions that allow storage up to 1TB.

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