If it gets approved, this could mean a new era for the way users experience music on the iPhone platform. If you don't already know, Rhapsody offers a subscription based, on demand way to listen to music. Basically users pay a fee of $12.99/month to listen to unlimited music on their computers. It's library currently has 8 million songs to choose from, commercial free.
Obviously, anybody can see how an on-demand music application could pose a direct threat to the iTunes store. Even Rhapsody mentioned on its blog, "I can’t even count the number of times I’ve wanted to hear a song on my iPhone and guiltily plopped down $.99 to iTunes to please my impatient self. When I first used the Rhapsody app it seriously felt like the sun shone a little brighter that day." While Apple is making a killing off selling individuals song downloads for about a buck a pop on it's own store, Rhapsody could bring unlimited amounts of music to users for a small monthly subscription.
So if the app gets approved, Rhapsody subscribers can upgrade their accounts to a $14.99 per month mobile plan which lets users stream music through their current data plans, like (3G or Edge), GDGT found this pricing information. This is pretty neat, but it means if a user is in a tunnel while riding on the subway, yup, no access to their music. Which is where the downfall of an application like this comes to light. On the other hand, Spotify, an up and coming European competitor to Rhapsody, which could be looking into US expansion, also offers a subscription based music service, but its application let's users cache music for offline enjoyment. Take note, this application also isn't available on the iPhone yet.
The one major deal Rhapsody has in the works with Apple is that, if a user decides they actually want to buy and download whatever song they are listening to, instead of linking to Rhapsody's own music store, users will be taken to the iTunes store, where they can make the purchase there.
As of now, the only music streaming services available on the iPhone are much more radio like. Pandora's application lets users stream music based on category and style and so does Last.fm's. Both applications have yet to offer users to actually pick whichever song they'd like, on demand, something Rhapsody aims to solve. Here's a video of the Rhapsody application in action.