AppleInsider is reporting that Apple has quietly updated its iTunes Producer Software.
Apple Lossless is said to produce CD quality sound in "about half the storage space", in the release of iTunes Producer 1.4 Apple has added support for Apple Lossless format.
Currently the iTunes Music Store only contains AAC format at varying encoded rates, with the new iTunes Producer Apple says that the software "now encodes music in Apple Lossless format, which produces larger audio files and will increase upload time."
It is often been pointed out that the quality of downloads from the iTunes Music Store does not rival that of Compact Discs, with the addition of Apple Lossless format it's possible that Apple will aim it at audiophiles, it is unknown whether Apple will charge more for Lossless downloads.