Just when I thought that the digital music industry has reached its pinnacle with iTunes, here comes another contender; Spotify. When it landed on the US soil in July, it never looked back.  The company has recorded several milestones already, and will soon be implementing innovative concepts that could plague the market, and probably spell demise for its opponents.

Spotify now opens it gates wide for iOS developers via the free API libspotify. With this feature, third party app developers will now be able to write applications and integrated with Spotify music streaming service; iPad-specific apps perhaps. There is one limitation though: this will run in a non-commercial platform, therefore these are only for free apps. But Spotify is also looking into discussions with for-profit developers.

Nearly 2 month-old in the US, Spotify has been one of the most reviewed (mostly rave reviews) music streaming services in the digital world lately.  There have been loads of noteworthy updates since July:

• A runaway winner for Product of the Year: Peter Sims, in his Reuters article expressed his fanaticism of Spotify and how it could very well be the product of the year. He said, “Of course, it’s too soon to tell how Spotify usage will unfold in the US, but early indications via the blogs, Twitter, and elsewhere suggest strongly positive experiences, and rapid user adoption, with few complaints.  Spotify seems to have combined the best aspects of social with music, including an improvement on iTunes.”

He also mentioned Spotify being eye candy for those who are craving big and lucrative acquisitions.

• Billion-dollar valuation: The US launch has brought Spotify a whopping $1.1 billion valuation. But at the same time, it faces the usual hurdle of a budding and promising organization, an infringement lawsuit.

• 1.4 million users in the US: Anticipation is peaking when Spotify crashed into the US surface. In just weeks according to All Things D, it has scored 1.4 million users and 175,000 paying customers. The incredible adoption rate

The future of the music industry lies in the cloud.  Joining the bandwagon of those who want a taste of success in this avenue are RIM Blackberry Music and MySpace.  Even the social networking titan Facebook is now polishing social music framework with partners before the secret grand launch to improve users’ stickiness into the site.

Spotify has changed the landscape of the music arena. Sharing, playing, storing and accessing music in the cloud has paid off big time for the startup.  It has fuelled the competition even more with SoundHound integration.  The trajectory pattern of the business is still pointing up, and iTunes has plenty of reasons to be threatened.