5 Reasons Why Apple Could Reject Spotify's iPhone App

An iPhone can store up to 32GB worth of music, each byte of which could, in the worst case scenario, have to transit via O2's network (in the UK).

(3) Apple might be opening a Pandora box (see the irony?)
If Apple allows Spotify to operate, it will also need to allow others to do so. Pandora and Last.fm already have their iPhone app (although O2 apparently forbids continuous streaming of music and video in their terms and conditions).

(4) Doesn't offer download link yet
Spotify doesn't allow mighty Apple to collect its Apple tax from the cash strapped start-up. Which is bad. The download link on the desktop version of Spotify goes to iTunes rival, 7Digital (although we doubt that 7Digital is becoming rich with that) and the mobile version is likely to do the same.

(5) Apple might decide to offer its own
What prevents Apple from launching its own version of Spotify? Nothing really. If it decides to do so, record labels are likely to back it. Apple still hast the biggest number of songs, podcasts and audiobooks from any audio stores in the world and would have a definite advantage over Spotify.

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Therefore, our educated guess is that if Apple is coerced to put Spotify on the iPhone, it will do a "Microsoft" and just like the software giant tackling Netscape with Internet Explorer, it may release its own online streaming service.