The word is that music on demand service, Spotify is trying to launch an application for the Apple iPhone whereby the user can create free playlists of their favourite tunes from various record labels, although you will need to put up with a few intermittent radio-style ads.
According to an article on channel4, Spotify has submitted their application for the iPhone and allows the iPhone to download tracks and listen to them much like Apple’s own iTunes. iTunes charges 79p per track, and if Spotify does it for free it will undoubtedly be encroaching on some iTunes revenue.
Apple guards their iTunes marketplace closely and so will probably block the Spotify service as Apple has absolute discretion on what applications are used.