Will Spotify make it to the iPhone?

How good does a streaming-music service need to be before it replaces your collection of MP3s? That's the question Apple is asking itself right now, as it deliberates on approving the Spotify app for the iPhone and iPod Touch. Here, finally, is a streaming-music app (and desktop application) that promises to stream any of over 6 million songs on-demand, give you the ability to create and save ordered playlists of songs, and best of all, Spotify can save your favorite tunes offline so you can play them even when you're not connected to the Internet.

Sound too good to be true? Well, you might be right. Spotify has been catching on like wildfire in Europe, but the company has been understandably cautious about coming to the U.S., where similar services such as Pandora, Last.fm, and Slacker have all been subject to strict licensing and streaming arrangements that would make a service like Spotify seem unthinkable. Another wrinkle in the Spotify mobile app's appeal is that it will only work for users who've upgraded to Spotify's ad-free premium service ($14/mo). To use Spotify for free, you'll have to relegate yourself to the desktop application.

Here's a look at the Spotify desktop application. To understand Spotify, just think of all the music you could download on iTunes; now, imagine not having to pay for any of it. It's legal and it's coming soon the the U.S. whether Apple likes it or not.

(Credit: Spotify)

Legal and financial barriers aside, the idea that Apple would let Spotify onto the iPhone seems a little far fetched. For starters, it competes directly with the iPhone's own iPod music player app. Its second offense is that it may require a substantial chunk of memory to cache offline content (a feature not granted to Slacker's app). Finally, Wired's Eliot Van Buskirk reports that songs played using the Spotify app do not include links for purchasing the songs using iTunes. While linking songs to the iTunes store isn't explicitly required by Apple, it certainly hasn't hurt the majority of streaming-music apps that have included the feature.

At this point, all we can do is wait and see. With or without Apple's approval of the Spotify mobile app, there's still some reassuring signs that the Spotify desktop client will hit the U.S. before the year's out. If Europe's speedy adoption of Spotify is any indication of eventual U.S. success, the online music landscape (especially subscription and streaming-music services) could be headed for another shake-up.