Citing a “plugged-in industry executive”, BusinessInsider is reporting that Hulu is working on a “badass” iPhone app that will work on both 3G and WiFi networks.

If true, a Hulu app would certainly be a huge hit on the iTunes App Store.

Interestingly, Hulu competes directly with iTunes as it offers an impressive number of TV Shows, and to a lesser extent movies, that would otherwise cost a few bucks to obtain via iTunes. A Hulu app on the iPhone would therefore almost certainly eat into some of Apple’s iTunes sales, but it’s important to remember that Apple barely breaks above even when it comes to iTunes.

It’s real money maker comes via hardware sales. In that regard, if a Hulu app can make the iPhone and iPod Touch that much more appealing for interested consumers, I’m sure Apple would gladly sell you a $399 iPod Touch in exchange for a little less of your money on iTunes.

This mythical Hulu app is rumored to be coming soon. And so the wait begins…