Apple's iTunes Increases Its Lead In The Music Market

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Credit: RossinaBossioB

Eighteen months after surpassing Wal-Mart (NYSE: WMT) as the biggest music retailer in the United States, Apple’s iTunes now accounts for a quarter of all music sales in the country when measured by unit-sales volume, up from 21 percent a year ago, according to the NPD Group. And it likely has lots of room to grow, considering that digital music sales accounted for only 35 percent of all music sold during the first half of the year. NPD is projecting that digital music sales will “nearly equal” CD sales by the end of 2010.

In the digital music market, iTunes accounted for a commanding 69 percent of sales, up slightly compared to the same period a year ago. Amazon’s rival MP3 store, however, did manage to increase its share to 7.6 percent, up from 5.1 percent (Via MediaMemo).

There have been other signs too that consumers are willing to try out iTunes competitors, such as Amazon (NSDQ: AMZN) MP3. For instance, an NPD study from earlier this year indicated that 16 percent of digital-music buyers in the U.S. had used Amazon MP3 to purchase tracks.

That’s a good sign for iLike, which launched its own download store last week, under the assumption that consumers using its music app might also be willing to use it to make an impulse purchase. MySpace is in late stage talks to purchase the startup.

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Mike

I'm really surprised that only 16% of the people have tried Amazon. I think they've done an outstanding job of building up their collection and making their music very affordable. And with it being completely compatible with iTunes, its hard to understand why they are so far off considering their prices are for the most part better. They offer outstanding deals that iTunes can't compete with. I love their daily mp3 album deal as well as their daily free song. Great way to discover new music. I usually buy one or two albums a week through their daily deal special – usually for either $2 or $3. I use the following to track it:

http://www.frugalgadgets.com/amazon-mp3-daily-deal.php

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