Rhapsody for iPhone: RealNetworks Tweaks Apple's Tail

Reflecting the personality of its combative CEO, Rob Glaser, RealNetworks has never been a company to shrink from a fight. Over the years, it has gone head-to-head with Microsoft, Apple, the record industry, and most recently with RealDVD, the movie studios. But its latest challenge to Apple shows a sense of strategic timing hat has been missing from some past Real moves.

As described by my colleague Arik Hesseldahl, Real has sent the iTunes App Store a free app that would bring the $15-a-month Rhapsody subscription music service to the iPhone.

A month ago, I suspect Apple would have rejected Rhapsody out of hand. Apple has been ruthless about blocking apps that competed with its own offerings and Rhapsody definitely competes with iTunes music. Furthermore, Apple CEO Steve Jobs has an undisguised loathing for subscription music services that he claims Apple's customers neither need nor want.

But Apple's rejection of the Google Voice telephony app has focused all sorts of unwelcome attention, including a Federal Communications Commission inquiry, on the opaque process by which offerings are approved or rejected. Though Apple and Jobs usually have no problem ignoring public opinion, the heat that might result from a blatant rejection of a competitor's product might be more than they might care to handle right now.

Real got into a major dustup with Apple in 2004. I came up with a version of its Helix digital rights manager that would allow songs sold by its music store to be played on iPods (back then, the idea of legal downloads of DRM-free music was still a distant dream.) apple quickly revised iPods' software to block the Real content. Apple won that round pretty easily, but the new tussle could be tougher.

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