Apple competitor Napster may be facing tough challenges, a report claims.

Citing sources close to the company, Digital Music News (DMN) speculates a "substantial round of layoffs" may be planned. Napster denies the claims, the report reveals.

DMN's sources also say that Napster's management are considering selling company assets.

The company will report its financial results early next month. Despite Napster's official denial of DMN's statements, "the story is expected to develop over the next few weeks," DMN states.