No drama happened over the Rhapsody iPhone app from RealNetworks as Apple has approved the application for the iPhone and iPod touch. Even though Rhapsody subscribers are rejoicing, the analysts are trying to find out what this means for iTunes.

Rhapsody submitted the on-demand, streaming music application to Apple for review in late August. The music service offered by the application is a competitor to Apple, and so it was not sure if Apple would allow RealNetworks to offer a competing music service. If you are a Rhapsody subscribers, you can listen to their song library on the iPhone by paying them a $14.95 monthly fee, instead of buying songs from Apple’s iTunes Store for 99 cents or $1.29 each.

Subscribers

If you’re a subscriber, you can log in to the app with year username and password. Then you can check out the queue, their library, or browse the Rhapsody library for new music to stream. If you are a non-subscriber, you will be able to access the app for a limited free-trial period.

What’s Possible with Rhapsody

“If you have kids, there are a ton of options for kid-friendly, parent-approved music to help entertain your little ones while you’re running errands. You’ll always be able to see if the ‘Top 40′ are really all that awesome,” said Lacy Kemp of RealNetworks. “There are so many ways to find new music on Rhapsody. Try listening to an artist station. You’ll be amazed at what you find!”

You can also save the songs you’ve listened to as a playlist, experiment with new music without spending extra money, hear new music before any other place gets it by hooking into Rhapsody’s exclusive artist premieres, carry eight million songs on one device.

“Take advantage of one of Rhapsody’s best features: Music discovery,” Kemp said. “You’ll be amazed at the amount of new music you’ll hear — and even better — the amount of new music you’ll love. You’d never have an opportunity like that if you had to pay for every song you tried.”

Changing Scenario

With the iPhone app, RealNetworks will have a competitive advantage over its competitors.

The big question here is how the app might impact iTunes. However, there are two problems with Rhapsody’s service. First, you can’t play the music unless you are connected to the Internet. Second, the app doesn’t run in the background, so you can’t respond to e-mail while you are listening to music through Rhapsody.

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