Apple approves rival music app — just the start?

Online, ad-supported music service Spotify — available only in Europe so far, but garnering tremendous attention — could be set for yet another leap forward as Apple has apparently approved an iPhone version of the app.

The approval is important for several reasons. First, it represents perhaps the first time that Apple has approved an app that is clearly threatening to its core business. Spotify’s playlist-creating/sharing and music streaming service is a clear competitor/alternative to Apple’s iTunes, particularly if Spotify becomes available as an iPhone app.

Second, it shows Apple could be beginning to buckle under pressure from competitors (including Google, Skype, Rhapsody, all of whom have app or functionality approvals pending) and others (including the FCC) to open up the popular iPhone platform to greater competition.

Finally, in one could be bad news for competitors, Apple’s willingness to let would-be competitors onto its platform could be a sign of its own confidence in just how thoroughly it is dominating the early days of the mobile apps market. Recent numbers from AdMob, well-reported by GigaOm, show that the iPhone currently represents about 60 percent of smartphone usage per month and iPhone apps are on a run rate to generate $2.4 billion annually.

Now Apple isn’t raking in the majority of those bucks, its partners (app developers) are. Apple makes its money in many other ways today — device, software and music sales, mainly — and with a thriving platform can expand into countless new areas in the future.

As we said earlier this week, the mobile industry — and Apple — is at an absolutely crucial tipping point that not only will determine how the industry works, but which companies will emerge as the biggest winners.

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