Radio stations may soon have one less reason to hate Apple (Nasdaq: AAPL). New rumors suggest that the company is readying a built-in FM radio application for the iPhone.

Apple watcher 9to5Mac has received a tip from an unnamed source, claiming that the FM radio program will be able to run in the background on iPhone 3G, 3GS, and the latest iPod touch models.

If true, this wouldn't come as much of a surprise. Apple's entry-level nano now comes with an FM tuner, complete with the ability to pause live radio and tag songs to purchase later through iTunes.

The only odd thing about a full-blown FM rollout is that it would validate rivals Microsoft (Nasdaq: MSFT) and SanDisk (Nasdaq: SNDK), which have offered FM access for ages. Microsoft's newest Zune HD even tunes into HD Radiofor a broader range of terrestrial programming.

Why would Apple introduce a feature that has already been topped by Microsoft?

Smartphone owners may also wonder why Apple thinks they even careabout terrestrial radio. Some of its App Store's more popular music downloads include free music-discovery and Internet-radio faves Pandora and Yahoo! 's (Nasdaq: YHOO) Y! Music. Users can also pay for premium satellite radio through Sirius XM Radio (Nasdaq: SIRI).  

So what's the difference here? Save for the Sirius app, which runs on the AT&T (NYSE: T) network, most of these apps require Wi-Fi connectivity to stream effectively. This forces commuters or joggers to dive into their iPod collections. Commercial-laden terrestrial radio may not be much of an upgrade, but it's an outlet for fresh content on the go.

Apple needs to be careful, though. If it makes too big a deal out of FM radio reception, it won't be long before Microsoft launches a series of "I'm an iPod/I'm a Zune HD" ads.  

This article was originally published as Is Apple Going Terrestrial?on Fool.com

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