The next-generation Android build named Gingerbread, slated for release later this year, may be getting some sort of music service though it’s still unclear how extensive the service will be and whether it will be full featured enough to be an iTunes competitor.

This is yet another area that Google and Apple will be in direct competition with–mobile phones, mobile OS, mobile advertising, and services such as email (Mobile Me v. Google GMail). Google has since purchased Simplified Media, the makers of an iPhone app that allowed iPhone users to stream music over the air from their Macs to their iPhones, negating the need for expansive mobile storage. While Google hasn’t announced any of their plans after the acquisition, many are speculating that the company hopes to get its foot into the music market, an area where Apple is the dominant player with its iTunes PC and Mac software, its iPod and iPhone synchronization engine, as well as its online store. Additionally, Google has also been experimenting with online movie rentals through its popular YouTube engine.

For its part, Apple had acquired a streaming service called LaLa, which many are expecting to hit mobile devices as well as some sort of updated Apple TV. That acquisition will give Apple the ability to host music, movies, and multimedia files that users had purchased on iTunes and allow them to stream content on-demand to connected peripherals, like the iPhone and iPod Touch, also negating the need for copious amounts of memory on a mobile device.