“With iPod mania running full tilt, many people assume that Apple (AAPL ) utterly dominates the markets for digital-music players. And that includes Apple itself. ‘In the biggest markets we’re…40% to 50% of the market share of all MP3 players. That includes flash and hard-drive players,’ said Apple sales chief Phil Schiller during a May 14 Merrill Lynch conference call. He also claimed that iPod sales outstripped the combined sales of the competitors in second, third, fourth, and fifth place. ‘Our market share is tremendous,’ Schiller gushed,” Alex Salkever writes for BusinessWeek.

“Apple officials are careful to state that they’re referring only to markets in the U.S., Japan, and Western Europe, where they believe they have good tracking data. Although no one monitors overall international numbers, most analysts have assumed Apple has well over 25% of worldwide digital-music player sales. They base that view on Apple’s strength in those three key markets,” Salkever writes.

“Too bad their assumption is off base: The iPod’s global market share may actually fall well below the 25% mark… The iPod is clearly the market leader in digital-music players. And it’s certainly the coolest in the pack. But a quick look at the big picture shows that Apple has yet to achieve dominance in the sector, despite the hype,” Salkever writes.

Full article here.