Apple says it is looking closely at software firm RealNetworks' claim that it has found a way for tunes from its online store to be played on iPods.
Apple protects its tunes so they cannot transfer to other devices
Real said it had created a program to mimic Apple's protection software which allows tracks downloaded from iTunes stores to be played only on iPods.
Apple said it was "stunned" at Real's "hacker tactics".
Real has hit back by saying that consumers and not Apple should decide what music goes on their iPod.
The media software firm maintains it has not infringed Apple's intellectual property rights.
"We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod," said Apple in a statement.
"We are investigating the implications of their actions under the DMCA (Digital Millennium Copyright Act) and other laws."
"We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods."
Tunes from Real's shop only play on a few devices
Real said its engineers used publicly-available information in order to work out how to make files compatible with Apple's digital rights management (DRM) software, called FairPlay.
Rob Glaser, RealNetworks' chief executive, said it had developed it so that consumers could buy music once and play it anywhere.
In response to Apple's accusations, Real said; "Consumers, and not Apple, should be the ones choosing what music goes on their iPod.
"Harmony follows in a well-established tradition of fully legal, independently developed paths to achieve compatibility," said the statement.
DRM is designed to stop unauthorised copying or playback of tracks purchased online.
Harmony means tunes from Real's net store can be played on iPods and on Microsoft-compatible devices.
Only one music player, the Creative Nomad Jukebox Zen Xtra and some personal digital assistants, play tracks downloaded from Real's online music store, currently only available in the US.
Real's software means when a user buys a song from its shop, the program will check the music device on which the tune is to be played, and will change its format if necessary.
Apple has previously reacted strongly to attempts at cracking its DRM software, and it has resisted calls to license its FairPlay copy-protection software