By Prince McLean

Published: 12:00 PM EST

A new version of Apple Computer's iTunes Producer software suggest that the company may begin to offer tracks through its iTunes Music Store that are encoded in its higher-quality lossless compression format.

Apple introduced the format in 2004 as part of QuickTIme 6.5.1, saying it offered CD-quality audio in "about half the storage space." The company later added support for the format to iTunes 4.5.

In a private release of iTunes Producer 1.4 this week, Apple said the software "now encodes music in Apple Lossless format, which produces larger audio files and will increase upload time."

iTunes Producer is distributed to record labels by Apple as a tool for prepping and submitting their content for inclusion on the iTunes Music Store. The iTunes service currently serves up tracks in only the Advanced Audio Coding (AAC) format.

Although the ACC format also produces tracks with a quality rivaling that of uncompressed CD audio, it does so to a lesser extent than the Apple Lossless format.

It's unclear what role the Apple Lossless format will play on the iTunes music store, if at all. Unlike AAC, the format does not presently utilize a digital rights management (DRM) scheme to assure copy-protection -- though popular speculation is that DRM could be applied to the format in much the same way as other QuickTime file formats.

The iTunes Producer 1.4 release also improves stability of uploading playlists and displays upload progress, sources told AppleInsider.