“Apple is working with the four largest record labels to stimulate digital sales of albums by bundling a new interactive booklet, sleeve notes and other interactive features with music downloads, in a move it hopes will change buying trends on its online iTunes store,” Matthew Garrahan, Kenneth Li, and Joseph Menn report for The Financial Times.

“The talks come as Apple is separately racing to offer a portable, full-featured, tablet-sized computer in time for the Christmas shopping season, in what the entertainment industry hopes will be a new revolution. The device could be launched alongside the new content deals, including those aimed at stimulating sales of CD-length music, according to people briefed on the project,” Garrahan, Li, and Menn report.

“Apple is working with EMI, Sony Music, Warner Music and Universal Music Group, on a project the company has codenamed ‘Cocktail,’ according to four people familiar with the situation,” Garrahan, Li, and Menn report. “The labels and Apple are working towards a September launch date for the project, which aims to boost interest in albums by bundling liner notes and video clips with the music.”

“The new touch-sensitive device Apple is working on will have a screen that may be up to 10 inches diagonally. It will connect to the internet like the iPod Touch – probably without phone capability but with access to Apple’s online stores,” Garrahan, Li, and Menn report. “‘It’s going to be fabulous for watching movies,’ said one entertainment executive. Book publishers have been in talks with Apple and are optimistic about their services being offered with the new computer, which could provide an alternative to Amazon’s Kindle.”

MacDailyNews Take: And, unlike any Kindle, also in *gasp* color. Imagine that.

More in the full article here.

MacDailyNews Take: Yeah, yeah, new interactive booklet, sleeve notes, blah, blah, blah. Another bundling attempt by the music cartel. Whatevah. The real news is that others — in the content industries, at the very least — are reportedly being shown this “Macbook touch” or “iTablet” or whatever-you-want-to call-it by Apple in preparation for a Christmas 2009 launch date, which lends significant additional credence to rumors of the existence of such a device.

In a related article, also published for FT today, Garrahan, Li, and Menn report, “‘It would be a colour, flat-panel TV to the old-fashioned, black and white TV of the Kindle,’ one publishing executive said.”

“Apple does not appear to have briefed film studios, but Hollywood executives said they would be willing to contribute more content than is now available over iTunes,” Garrahan, Li, and Menn report. “Large video game publishers are also eager for the product and say they could quickly optimise existing games for a hardware display that shows off graphics-intensive content.”

Garrahan, Li, and Menn report, “Since demand for tablet computers has been disappointing so far, Steve Jobs, Apple’s chief executive, has been pressing for compelling hardware functions.”

“The new machine could cost between $600 and $1,000, according to Oppenheimer & Co analyst Yair Reiner. ‘I think it will have a lot of the functionality of the iPod touch, but will be quite a bit bigger,’ he said,” Garrahan, Li, and Menn report. “Mr Reiner and others cautioned that Apple might not be able to get all of the components it needs in the right packaging by the end of the year, though Apple is aiming for September or October.”

Full article here.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]