What does Apple’s Spotify approval mean for the app store?

Apple has given the thumbs up for the Spotify iPhone app. As well as being good news for music lovers, it may be a sign that Apple is feeling the heat over claims of anti-competitiveness in its approval policy.

For those who’ve not encountered it (the service isn’t scheduled to launch in the US until later this year), Spotify is a desktop based streaming music service with a few differences to its main rivals. Firstly, it has an extremely wide selection of music: certainly not everything, but a good chunk of both major titles and more obscure music (all of which is legally licensed). Secondly, the user has complete control over what songs they listen to and when. Thirdly, it’s free to use: there are radio-style commercials every 15 minutes or so, though a monthly subscription option removes these.

The iPhone app, which is free but only available to the monthly subscribers, goes one step further: as well as listening “live” through the phone’s internet connection, users can also put together a playlist for listening offline, with the relevant tracks downloaded to the phone. It’s worth noting the user doesn’t get the tracks permanently stored on the handset: from the description Spotify gives, the tracks can only be listened to once before they have to be downloaded again (or simply listened to while online). Here’s a short video presenting some of the features of the application:

When Spotify announced the app, the big question was how Apple would response. If you can listen to pretty much any song you like on your iPhone through Spotify whenever you choose to, legally and without extra cost, there’s much less incentive to use iTunes – and in turn, less need to buy songs from the iTunes store.

However, Apple has approved the app, though it’s not yet commented on its decision. The generous view is that it’s concluded that despite the potential loss to iTunes, simply having the app available makes the iPhone itself more attractive and may boost sales. (There’s no word yet of Apple cutting any financial deal with Spotify over the app.)

The less generous view is that Apple is starting to fear regulatory involvement over its approval process. It recently rejected Google Voice, an app which would have allowed users to make free phone calls within the US. As you’d imagine, that wouldn’t have gone down too well with AT&T which subsidizes the handset costs on the basis of getting future call revenues from iPhone users. However, the Federal Communications Commission – which has already talked of looking into the Apple/AT&T exclusive carrier deal – has begun an investigation into the Google Voice rejection.

And of course, there’s the extremely cynical view based on previous app decisions: the monkey which Apple employs to vet app submissions threw the banana representing Spotify on to the side of the cage marked ‘Yes’.

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