Spotify has submitted its iPhone app to Apple’s App Store and the company wants everybody to know it. An official blog post has gone up, demos of the app to select press have been given, and a YouTube video (see below) is doing the rounds.

Now the wait begins, however: Will Apple approve the music streaming service for distribution on its platform, a service that, when you dig a little deeper, appears to compete more directly with the company’s own iTunes Music Store than similar offerings, such as Last.fm and Pandora, both of which have already been given the go-ahead by Cupertino.

Spotify, which has become the talk of the town here in London, could launch in the US as early as September, reports the Observer newspaper. The music streaming service, which offers both ad-supported and subscription versions, is seen as not only a real iTunes contender but also compelling enough and the right side of “free” to wean users off of illegal file sharing networks.

I’m a big fan myself and am particularly excited about the up and coming Android, Symbian and iPhone mobile versions of the service.

See also: Music streaming service Spotify demos Android app, off-line syncing included!

Along with the incumbent iTunes — who offer a different model: ala carte downloads — Spotify will face much competition in the ad-supported and subscription streaming space. US-strongholds include services such as Pandora, iMeem, MySpace and Last.fm (ad-supported), along with Napster and Rhapsody (subscription).

One other competitor whom Spotify may or may not have had in mind when deciding to compete in the US is Microsoft (the underwhelming Zune aside). The Redmond giant is reportedly launching a similar service to European-based Spotify later this month.