Minority Report: Why Apple was smart to OK 'iTunes killer'

Spotify app approved for the iPhone... can't wait to use it

Though Apple has rejected many iPhone apps that may threaten its business, it's approved a music service dubbed the 'iTunes killer'. Seb Janacek explains why this was a good move.

Last week's news that Apple had approved the Spotify app for the iPhone left me surprised, delighted and intrigued in equal measure. Let's cover those responses in order.

I wrote about Spotify's iPhone app back in July when it was first submitted for approval. I am a long-time fan of the service, which allows you to stream music at will from a huge online database for free, as long as you don't mind a few adverts.

I had been hoping the app would get approval, perhaps against my better judgement - after all, Spotify has been labelled rightly or wrongly as an 'iTunes killer'.

It's hardly a label that would endear it to Apple, which has shown it is prepared to be ruthless in its rejection of any app threatening to impinge on its user experience, its core functionality or its margins. Just ask Google.

Yet, the Spotify app was approved. Now iPhone users are presented with the tantalising prospect of access to a huge music database. And for just £10 per month, it's ad-free.

Approving the app is the right move for Apple. The decision will help it avoid any well-tossed javelins from its increasing anti-competitive lobbyists. It ensures the company doesn't fall behind its own competitors - Spotify is working on an Android app too. And furthermore, the US market for streamed music is still wide open - Spotify's partner for buying tracks currently has no US presence.

Spotify may be the first but it won't be the last to tap into this new zeitgeist for streamed media. Real has announced it is planning to submit its own streaming app for approval to Apple. Giving one the green light but not the other would be difficult - yet okaying Real's app may be a less than palatable decision for Apple given the animosity that developed between Apple and Real in the Fairplay DRM squabble.

However, if Apple doesn't see Spotify as a threat, it's unlikely to be too concerned about the rest.

Apple has previously rejected the song rental model favoured by Real, Microsoft and the invigorated Napster and stuck with its per-track or per-album fee. And with some justification. One in four songs sold in the US are now sold through the iTunes store, according to a recent report from the NPD Group. In turn, Apple has sold around 200 million iPods on the back of the music-device lock-in.

However, as Steve Jobs' musical hero Bob Dylan once sang, 'The Times They Are A-Changin''. A few years ago an Apple-sanctioned music subscription service would have been unthinkable. Now, the landscape may be changing.

The subscription model for devices such as the iPhone seem far more compelling given the wide range of licensing arrangements that exist, the growth of fast mobile bandwidth such as 3G and the rise of the iPhone and other converged mobile devices.

Any move to add a subscription may be some time off. It would also lead to a new model for mobile media devices needing to play the streamed music, lessening the reliance on device storage.

You can bet Apple will be watching how successful Spotify is in signing up and retaining customers to the subscription model.

In the meantime, I'm itching to get my Spotify subscription updated to Premium and downloading the app to my iPhone as soon as it becomes available.