Apple is cutting the price of some songs in its market-leading iTunes online store to as little as 46p in the US and plans to make every track available without copy protection.
In Apple's final appearance at the Macworld trade show in San Francisco, marketing executive Philip Schiller said iTunes song prices would come in three tiers: 49p, 66p and 87p for US buyers instead of the current flat rate 66p.
Prices for users of the UK iTunes web store will also become variable but will cost more at 59p, 79p or 99p rather than the current flat rate of 79p.
Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management" or DRM, technology that limits people's ability to copy songs or move them to multiple computers.
Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library would be available that way.
While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection.
Amazon.com started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.
Mr Schiller also announced that iPhone 3G users would be able to buy songs from the iTunes store using the cellular data network. Previously, iPhone users could shop for tunes when connected to a Wi-Fi hotspot.
The iTunes changes marked the highlights of Mr Schiller's run as a stand-in for chief executive Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone. Apple said last month that Mr Jobs would not address the throngs this time because the company planned to pull out of Macworld next year.
Lower iTunes prices were Apple's only nod to the recession - and an oblique one at that, as record labels have been asking for years to set varying song prices.
Rather than an inexpensive new Mac to lure budget-conscious buyers, Mr Schiller unveiled a new £1,880 Macbook Pro laptop with a 17-inch screen and the sleek aluminium casing the company debuted with the super-thin Macbook Air.
He also unwrapped new versions of two software packages for Macs, including the iLife multimedia programs.Reuse content