Apple iTunes Becomes #1 Digital Music Retailer

Apple’s iTunes music store has surpassed Wal-Mart to become the biggest music retailer in the US, according to the market research group NPD. More music was sold through the iTunes online store in January and February of this year than was bought from Wal-Mart.

NPD based its conclusions on the premise that the sale of one CD album was equal to 12 digital song downloads, excluding wireless transactions. Since its launch in 2004, Apple iTunes now has over 50 million customers who have downloaded over 4 billion songs from the catalogue of 6 million-plus songs.

Wal-Mart has its own digital music retailer at Walmart.com, selling songs for $.94 per track, a lower rate than iTunes’ typical $.99. But Wal-Mart’s limited selection, strict censorship policies and inability to flawlessly integrate usage with iPods and other MP3 players may all have led to its decline.

“We launched iTunes less than five years ago, and it has now become the No 1 music retailer in the world,” - said Eddy Cue, Apple’s vice-president of iTunes.

“We are thrilled, and would like to thank all of our customers for helping us reach this incredible milestone. If you look at what is happening to the CD and the growth of the digital side, it’s a pattern that is going to hold,” - he said.

While consumers are still buying more CDs in stores, the gap between buying CDs and digital downloading and online retailing is shrinking.

“It underscores a very important trend in the industry,” - said Michael Gartenberg, vice president and research director at Jupiter Research. “It wasn’t that long ago that Apple was proud of the fact that they were No. 4 and rising and (then) No. 3 and No. 2.”

As the biggest digital music retailed in the United States, Apple will have to face MySpace -  the biggest social networking site in the World.  Just a day ago, MySpace announced that it had signed a deal with three major record labels to sell digital music and stream songs through its web site, signaling major competition to iTunes.