According to a Reuters report, in a move similar to the one made by Napster earlier this year, digital music site Rhapsody has opened a download store providing MP3 tracks compatible with the iPod in order to challenge Apple’s monopolistic music empire, iTunes.

“We’re no longer competing with the iPod,” said Rhapsody’s Vice President Neil Smith. “We’re embracing it.”

Given the vast popularity of Apple’s portable music player, a digital music store has no choice but to provide tracks compatible with the iPod if it wants a chance to compete with Apple’s iTunes.

The report adds that until now, Rhapsody has been largely a subscription-based service delivering unlimited streaming to its customers for $13 to $15 a month.

The report continues by saying that Rhapsody will also provide the music store portion of MTV’s music Web site as well as content for the popular Facebook application, iLike.

Additionally, the report notes, Rhapsody services will be available for Verizon cell phone users via the wireless VCAST service. Songs purchased from phones can then be transferred to computers.

A quick perusal of rhapsody.com indicates that most full albums retail for $10 and single tracks for $1.