The report in the Financial Times says the move could help Apple restore its relevance in music.
iTunes has long been the top digital music store, but sales of downloaded music are dropping, 12% from last year,
The main reason why Apple paid more than $3 billion to buy Beats in May is to help rstore its music sales.
The subscription service had less 200,000 users then, compared with more than 10 million for Spotify. But pushing it out to more than 200 million iPhones and iPads could let Apple catch up quickly.
The app will come as part of the next update to iOS, and could happen as early as March. Apple is also expected to release its watch around that time.