Nearly one month after its U.S. debut, the Spotify music service has handed out 1.4 million free trials of which 12.5 percent of those converted to one of the service’s paid packages. This means nearly 175,000 U.S. customers are paying for the service, according to All Things Digital.

Spotify, which arrived here from Europe on July 14, is available in three varieties: Free, Unlimited ($4.99 per month) and Premium ($9.99).

While it is not known which plan those that upgraded selected, there is a lot of incentive for iDevice owners to purchase the Premium package. With this, users can listen to music via their iDevice and also select songs and albums for offline listening.

Spotify’s arrival in the U.S. comes at a time of increased competition. In addition to Rhapsody, customers can select MOG, Rdio, and Slacker Radio, among others for their streaming audio needs.

In the end, All Things Digital suggests it may be too early to tell whether Spotify USA is a success or not, saying:

In any case, it’s still hard to gauge what the numbers mean — it’s very early, and there has been a lot of hype.

The free Spotify app is available in the App Store.