Apple actually did it, it approved an on-demand music streaming iPhone application that could compete directly with its own iTunes store. This one goes by the name of Spotify.
Spotify is an online music service that allows its current users to listen to a database of about 6 million songs. It works similar to Rhapsody, where you basically pay a monthly fee to listen to all sorts of music on your computer. Spotify offers a free advertising based service, and a £9.99 subscription based service. Currently, Spotify is not available in the US, but has attracted more than 2 million users in Europe.
Its newly approved iPhone application functions very similar to its service, giving its users access to the database on their iPhone, and also allowing them to cache up to 3,333 songs for offline listening, one reason why I was skeptical this app would actually get approved.
But there are several reasons why Apple probably approved the Spotify application, although none of them have been confirmed yet. One being, although a free download, Spotify's app will only be available to its paying subscribers, so it's not like just anybody can stream and cache free music. Also, the FCC paid close attention to Apple's recent removal of Google's Voice app, which could have the company loosening up its approval process in the App store now.
At the same time, Spotify's founder Daniel Ek said in an interview with the BBC on his reactions to Apple's approval, "We're not surprised but we're thrilled...we had a great dialogue with Apple from day one."
So now that the app has finally been approved, Spotify submitted a few months ago, we can all cross our fingers and anxiously await for Spotify's launch in the US, which is rumored to be later this year. The company better hurry though, Rhapsody recently submitted its own iPhone application to Apple that will function very similar to Spotify's app - and let's not forget, Rhapsody is already available in the US.
See the embedded video for the Spotify app in action.