“If you still think of online sales as a business on the fringe of the music industry, take another look. Digital downloads have become a force in the music world. As evidence, Apple’s iTunes Music Store today crossed the marketing landmark made famous by McDonald’s hamburgers: ‘More than 1 billion sold.’ And that means more than just bragging rights. Although digital song downloads are expected to account for only 6 percent of recorded music sales this year, that’s up from zero three years ago, Piper Jaffray analyst Gene Munster said,” Steve Alexander writes for The Minneapolis Star Tribune. “‘Twenty-five percent of worldwide industry sales will be made online,’ he said. In the United States, as much as half of all recorded music sales will be digital downloads a decade from now, Munster predicted.”
“Hitting the 1 billion mark also indicates that Apple’s iTunes Music Store will remain the undisputed world leader in online music marketing this year, with a projected 85 percent share of worldwide sales of individual songs online, [Munster] said,” Alexander writes. “Apple’s dominant position with iTunes is a direct result of its commanding lead in sales of digital music players, Munster said. The iTunes software is the way most consumers load music into Apple’s iPod music player. The iPod accounted for 78 percent of U.S. unit sales of digital music players last year, and about half of world unit sales, he said… When revenue from individual song sales are combined with subscription revenue, Apple’s worldwide market share of all digital music was 64 percent in 2005, and it is projected to grow to 70 percent this year, Munster said. Apple’s nearest online music competitors, RealNetworks and Napster, collectively have about 10 percent of total online music revenue, he said. Other companies that had been expected to do well in the online music business, Wal-Mart and Sony, have gained little market share, Munster noted.”
Full article here.
MacDailyNews Take: Let’s take a stroll down memory lane in our specially-selected related articles below. We’ll focus on a truncated look back at Microsoft as the representative of the also-ran failures because listing all of the iPod and iTunes “killers” would take up too much space.
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Enderle: Microsoft’s ‘PlaysForSure’ going to be a long-term problem for Apple – January 09, 2006
Microsoft, MTV target Apple’s iTunes Music Store leftovers – December 15, 2005
Analyst: Unlike Microsoft, Apple has the advantage by not licensing their technology – October 13, 2005
Analyst: Real and Microsoft deal ‘doesn’t change the dynamics for Apple in any way, shape or form’ – October 12, 2005
Microsoft’s Bill Gates’ prediction of Apple iPod market share decline fails to materialize – September 18, 2005
Apple’s vs. Microsoft’s music DRM: whose solution supports more users? – August 17, 2005
Microsoft executives acknowledge Apple’s ‘iPod Halo Effect’ – July 29, 2005
Microsoft’s Gates ‘not amused’ about Apple’s digital media supremacy, courts Hollywood allies – July 19, 2005
Microsoft dismisses threat of Apple’s ‘iPod Halo Effect’ – April 04, 2005
Microsoft management frustrated as 80 percent of MS workers with music players have Apple iPods – February 02, 2005
BusinessWeek writer: Microsoft will eventually dominate online music which ‘may be the best outcome – November 08, 2004
Guardian writer thinks Apple must open iPod or Microsoft will eventually own market – October 21, 2004
Microsoft attempts to isolate Apple with ‘PlaysForSure’ logo plan – October 19, 2004
Microsoft debuts ‘PlaysForSure’ logo to signify incompatiblity with Apple iPod, iTunes Music Store – October 15, 2004
Microsoft CEO Ballmer: ‘Apple iPod users are music thieves’ – October 04, 2004
WinInfo’s Thurrott: Apple acting ‘petty’ by not allowing Microsoft to sell music for iPod – September 03, 2004
ZDNet Editor: Apple will lose, Microsoft will win music wars – September 01, 2004
Is Gates’ Microsoft about to declare war on Apple’s iTunes, iPod? – July 25, 2004
Microsoft to release new Windows Media Player in attempt to match Apple’s iPod/iTunes synergy – June 02, 2004
Microsoft: we’ll sell music players that will ‘look and feel’ as good as Apple iPod for 80% less – May 27, 2004
Napster, others agree to use new Microsoft DRM media software, subscription music on portables – May 01, 2004
Columnist: Apple’s smug faithful will not prevail, Microsoft ‘good enough’ for the rest of us – April 16, 2004
Microsoft poised to release ‘iPod killer,’ enlists Creative, iRiver, Napster, others – March 17, 2004
Apple’s iPod mini sold out in many locations; Analyst: Microsoft could threaten iPod – March 01, 2004
Microsoft tries to push WMA by propping up beleaguered Napster – February 25, 2004
Microsoft’s plan to unseat Apple’s iPod juggernaut – February 10, 2004
Microsoft unhappy with HP, Apple music pact; says deal will ‘limit choice’ – January 13, 2004
Microsoft ponders iTunes Music Store-like service – July 28, 2003
Microsoft – AOL alliance might pose threat to AAC – May 30, 2003
Microsoft preparing counterattack against Apple’s iTunes Music Store – May 23, 2003
Competitors (including Microsoft) line up to knock off Apple’s iTunes Music Store – May 09, 2003