Apple's iTunes Increases Its Lead In The Music Market

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.