iTunes Music Store to Become Largest Music Retailer in ’08
Wal-Mart Stores’ days as the single largest music retailer in the US are numbered, so says a new report by the NPD Group. Within the past few weeks, iTMS has overtaken Best Buy and Target to become the second largest music retailer in the US and Wal-Mart is likely next. Russ Crupnick, the NPD Group’s president of Music, says while CD sales were down about 20% last year, digital sales grew by about 50% and that means “Apple will in all likelihood catch Wal-Mart this year”.
Crupnick also mentions that stats are stacked against traditional music vendors which “devote less and less floor space” to CDs which in turn results in fewer sales. According to the NPD Group, “nearly half of all U.S. teens (48 percent) did not purchase a CD last year” and that is up 10% from a year ago. Apparently, teens who lack a credit card also prefer to use Apple iTMS gift certificates which they can readily purchase at many retail locations.
I should mention that while iTMS’ thriving business is very positive news, most analysts agree that Apple’s main revenue growth over the next ten years will come from rising Mac sales due to increasing desktop market peneteration and the iPhone business.