The latest version of iTunes from Apple Inc. (AAPL) has cut off rival Palm Inc.'s (PALM) Pre smartphone.

Apple's online music and video bazaar now "disables devices falsely pretending to be iPods," which includes Palm's Pre, an Apple spokesman said.

The Pre smartphone has been able to access iTunes since going on sale in the U.S. in early June. But it was always unclear whether the Pre was doing so with Apple's permission. Given the latest iTunes update, Palm appears to have been acting on its own.

The development is a negative one for Palm, which is counting on Pre sales to turn around the company. With the move, Apple has dramatically limited one of the Pre's key competitive advantages: downloading music and videos from Apple's iTunes.

"If Apple chooses to disable media sync in iTunes, it will be a direct blow to their users who will be deprived of a seamless synchronization experience," Palm spokesman Lynn Fox said,

"However, people will have options," which include using previous versions of iTunes that are still Pre-compatible, she added.

For Apple, the new iTunes underscores its commitment to allow only authorized devices, such as its iPods and iPhones, to access its iTunes music store, which helps it corral more of the profits.

"As we've said before, newer versions of Apple's iTunes software may no longer provide syncing functionality with unsupported digital media players," the Apple spokesman added.

Apple shares were trading 3.1% higher at $146.72, while Palm shares are up 4.9% to $15.34.

-By Ben Charny; Dow Jones Newswires; 415-765-8230; ben.charny@dowjones.com