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Three-way fight for Real's iPhone-Rhapsody application

Inside Apple's dilemma

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Apple has another embarrassment brewing, as its secretive App Store guardians ponder whether to allow an app from RealNetworks onto the Store's virtual shelves.

As we reported earlier today, RealNetworks has submitted an iPhone/iPod touch application to Apple that will allow users of those devices to access Rhapsody's eight-million-plus song collection.

The company said on its blog: "There is nothing quite as satisfying as needing to hear a certain song RIGHT NOW and being able to scratch that itch."

But that scratching can commence only if Apple allows Rhapsody subscribers access to the RealNetworks application. But no one outside of Cupertino knows whether or not Apple will grant the application a place in the iTunes App Store.

If Apple's acceptance guidelines were clearer, and if Cupertino's record on which applications it takes and which it doesn't were more predictable, we could make an educated guess. But they're not and it isn't.

Take the Google Voice controversy, for example. Apple over the weekend provided a lengthy explanation to the US Federal Communications Commission about not having approved the application, denying that it had rejected it. Apple said: "Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it."

What concerned Apple was that the Google interface "appears to alter the iPhone's distinctive user experience." And Apple is all about user experience and interface commonality.

Whether Apple will decide that the Rhapsody subscription application has too much - or, for that matter, too little - in common with the Cupertino handheld's iPod application is anyone's guess.

The Rhapsody application most definitely competes with Apple's iTunes store, allowing access to tunes without paying Apple for that privilege. But it also provides music-lovers with another reason to buy an iPhone or iPod touch: access to a popular music-subscription service and itch-scratcher.

If you listen closely, you can almost hear the arguments emanating from Apple's galactic nerve center at One Infinite Loop, as a triangle of competing executives wrangle over whether to accept Rhapsody or suffer the public relations hit of excluding it.

One one side are proponents of Apple's iTunes Store cash cow. On the other are bean counters who want to see the iPhone top that purported 6.8 million sales projection for the current quarter. And on the third side are the guardians of Apple's image, who fear that another ham-handed App Store rejection is most definitely not in the company's interest.

And you can also almost hear the giggling at RealNetworks' Seattle, Washington headquarters. By loudly pre-announcing the Rhapsody app, they've put pressure on Cupertino to not anger its fans yet again.

PR disaster, cashflow hit, or iPhone sales hook? Your move, Cupertino. ®

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