Over at its corporate blog, RealNetworks its reporting that it’s submitted a Rhapsody application to the iPhone App Store. The app would bring Rhapsody to the iPhone and iPod Touch, letting owners of those devices pay a monthly fee ($14.99, apparently–the price of a Rhapsody to Go account) for unlimited access to the millions of tracks in Real’s catalog.

Here’s a video from Real showing the app in action:

Rhapsody for iPhone is missing one key feature offered by Rhapsody to Go on other devices: It can stream music (over both 3G and Wi-Fi) but can’t store it locally. That means it only works when you have an Internet connection. Real says it may add local music storage later, and that an upcoming Android version of Rhapsody will store music locally.

But even without the ability to store albums on the iPhone itself, Rhapsody could be what none of the many third-party music apps for the iPhone have been to date: a plausible full-blown iTunes substitute. Might a meaningful percentage of folks who spend $15 a month for 15 iTunes tracks prefer to invest the same amount of money in a service that lets them listen to everything it offers, for as long as they keep paying the monthly fee? We’ve never really had the opportunity to get an answer to that question, since iTunes and Rhapsody have never been available on the same portable device. Now they might–but only if Apple approves the Rhapsody application.

You can certainly imagine a scenario in which it declines to do so: After all, Rhapsody would definitely duplicate some features provided in the iPhone’s built-in iPod and iTunes applications. And like Google Voice, it would use its own interface for a core iPhone function (music listening, in this case) rather than “the iPhone’s distinctive user interface.” Oh, and it would just happen to compete directly with iTunes for iPhone owners’ dough.

Google Voice was kept out of the App Store–or, if you prefer Apple’s spin, not immediately allowed in–before the world knew it had been submitted. If Apple ends up accepting it, it’ll involve some combination of backpedaling, adjustments to the app by Google, and/or interference by the Feds. You gotta think that Real has announced it’s submitted the app not just to whip up the standard anticipatory enthusiasm–but also to make it tougher for Apple to reject it, especially in the wake of the Google Voice kerfuffle.

And just to show it’s not treading gingerly, Real’s blog post (by Lacy Kemp) gets a little snarky about iTunes:

I can’t even count the number of times I’ve wanted to hear a song on my iPhone and guiltily plopped down $.99 to iTunes to please my impatient self. When I first used the Rhapsody app it seriously felt like the sun shone a little brighter that day. Music matters that much.

It’ll be a thoroughly good thing for iPhone and iPod Touch owners if Apple quickly and quietly approves Rhapsody, and a lousy sign for the future of the platform if it doesn’t. Boy, do I ever hope that the next time I write about Rhapsody, it’s because it’s available in the App Store.

(Related note: I’m also still waiting for the impressive-looking iPhone edition of the excellent LaLa service, which I got a preview of ten months ago.)