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Spotify Approved: Does Apple Care More About Apps Than Music?

Apple’s approval Thursday of Spotify’s iPhone app confounded predictions that it would deny the app, or force Spotify to alter certain features. It was expected that Spotify would, at the very least, be asked to modify the offline playback mode, which allows users to sync playlists created from desktop to iPhone via WiFi so that […]

syncApple's approval Thursday of Spotify's iPhone app confounded predictions that it would deny the app, or force Spotify to alter certain features.

It was expected that Spotify would, at the very least, be asked to modify the offline playback mode, which allows users to sync playlists created from desktop to iPhone via WiFi so that they play back even over dodgy or nonexistent connections.

On Friday, Spotify confirmed to Wired.com that the version Apple approved does include the crucial offline playback mode, which could render the concept of buying songs from iTunes (or downloading them from bit torrent, for that matter) obsolete. Not only that, but Spotify also said that the approved version of the app contains no "buy" links to iTunes, the way many other music streaming apps do. Why, then, would Apple ever approve it?

As we pointed out earlier, one factor at play here could be that the mobile carriers, who are also part of this equation, like the offline playback mode because it keeps music streaming off of their networks. Apple almost certainly has to do fair amount of horse-trading with its carriers in various areas, and keeping music streaming offline would give it leverage.

But it's also possible that Apple simply doesn't much care about a subset iPhone and iPod Touch users defecting to Spotify and away from iTunes. Most iTunes users don't buy much music anyway. Steve Jobs admitted a couple of years ago that the average iPod only had 22 iTunes-purchased songs on it, and the number could be even lower today.

Meanwhile, about half of all iPhone users pay for one or more apps every month, according to an AdMob study, including musical apps with interactive music formats that let you do far more than you can with one of Apple's AAC files. Whether you buy your music as an AAC in the iTunes music store or as an app in the app store, Apple gets the same 30 or so percent.

The "app store" phenomenon is still only just getting started, despite over 65,000 apps already being available for Apple's platform alone. The company will apparently make $2.4 billion in revenue (update: or less) from the iPhone app store this year, while it made $3.3 billion in revenue in the iTunes music store last year. But the app store has only been around since last summer. Apple has been selling music for over six years.

A vibrant app store -- especially one that doesn't drive users to competing platforms like Android -- could be more important to Apple than ever selling another music download.

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