On Friday, Apple explained to the government why it blocked the Google Voice application from the iPhone App store. Among other reasons, it cited privacy concerns and potential user confusion.

But the company will soon face another decision about an application that could well be construed to compete with one of its core businesses.

RealNetworks is preparing to submit an application that would allow the iPhone to connect to Real’s Rhapsody music service. Rhapsody, which is part-owned by Viacom’s MTV Networks, allows members who pay $14.99 a month to listen to nearly any song they choose on a computer or on a compatible portable player. Until now, however, the service has not worked on iPods or iPhones.

The new application will let users listen to songs that are streamed over a Wi-Fi network or over a cellular data connection. It offers the ability to select songs by searching for them, play existing playlists created on a computer and make new playlists. If users want to purchase a permanent version of any song, the application links to Apple’s iTunes application, where it can be downloaded.

While this application might drive some sales for Apple, the company might also see it as direct competition to iTunes. After all, if you like streaming on demand, you may not need to buy as much music.

There are no on-demand music service applications currently available for the iPhone. There are a number of video streaming applications that both offer music videos and some television programs that Apple sells on iTunes. And there are many Internet radio applications, such as Pandora, that play songs streamed over the air. While those applications let users pick styles and genres of music, they can’t play individual songs.

Neil Smith, Rhapsody’s vice president of business management, said he expects that Apple will approve the application.

“The app store is likely to be bigger than the music store some day, and not approving things for the app store is giving people a reason to say, ‘I’m not going to buy an iPhone,’” he said.

Mr. Smith said that while Real did have conversations in advance about the application with Apple officials, it received no indication whether it would be approved.

“They said, ‘Submit it and see what happens,’” he said.

Real and Apple have had a contentious history. In 2004, Real introduced technology meant to circumvent Apple’s proprietary copy protection systems so that Real could sell protected music that could be played on an iPod. Apple said Real adopted “the tactics and ethics of a hacker to break into the iPod,” and it quickly modified its software to thwart Real’s service.

While Rhapsody competes with iTunes, the two companies also do business together. Real’s game software division has many iPhone applications for sale in the iTunes store. But Apple has not let close ties with other companies prevent it from rejecting iPhone applications. It turned down the Google Voice application and a Google Maps application while Eric Schmidt, Google’s chief executive, was on its board of directors. (He subsequently resigned.)

Apple’s public relations department has not responded to several e-mails asking for comment on the Rhapsody application.