Apple’s iTunes Store set to replace Wal-Mart as largest U.S. music retailer this year

Apple iTunes“Apple’s iTunes will likely whip past Wal-Mart Stores to become the largest U.S. music retailer sometime this year,” Greg Sandoval reports for CNET.

“The NPD Group issued a report Tuesday that said Apple had outpaced Best Buy and Target to become the No. 2 U.S. music retailer. Unless the downward trend in CD sales suddenly reverses, Apple will be No. 1, said Russ Crupnick, the NPD Group’s president of Music,” Sandoval reports.

“‘Digital sales were up close to 50 percent and CD sales were down 20 percent last year,’ Crupnick said. “‘Even at half that growth rate in digital sales, Apple will in all likelihood catch Wal-Mart this year,'” Sandoval reports.

“In the offline world, there is a sort of death spiral going on, Crupnick said. As CD sales continue to slide, retailers like Wal-Mart, Best Buy, and Target devote less and less floor space to discs–which of course serves to erode sales even further,” Sandoval reports.

“According to the report issued by NPD on Tuesday, nearly half of all U.S. teens (48 percent) did not purchase a CD last year. That is up from 2006, when about 38 percent of teens made no CD purchases,” Sandoval reports.

“The music industry should follow Apple’s lead and direct their attention to teenagers, Crupnick said. Teens lack credit cards and this often prevents them from buying at almost everywhere but iTunes, Crupnick said. Apple avoids credit cards by pushing the gift cards, which teens can pay for at retail locations and then use them to purchase songs online by keying in a code. No credit cards needed,” Sandoval reports.

More in the full article here.

[Thanks to MacDailyNews Reader “Oh no my shorts” for the heads up.]

29 Comments

  1. When these business success are realized the stock is going to move back up to where it was a couple of months ago. Who would have dared suggest that Apple would be this successful a couple of years ago? Oh maybe, SJ.

  2. Great job Apple. #1 soon.

    Although I heard from Zune Tongued In The Butt that Microsoft Zune Marketplace will be #1 real soon. I mean they must be selling a bazillion of these players by now right? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  3. The last part of the article doesn’t make sense. Teens don’t have a credit card to buy a CD in the store, but…. they can buy an iTunes gift card in the store and use that. So what do they buy the gift card with? If they can afford to buy a gift card, they should be able to buy a CD.

    How about the fact they don’t want a CD. (insert MDN standard rant here)

    With iTunes, these teens who more than likely live at home will use their parents cc to buy music. Now THAT is easier than going to the store to even buy a gift card.

    Ding! Dong! The CD is dead! The wicked CD is dead!

  4. And next year Zune Marketplace will replace I-Tunes Store as the number one music retailer.

    Points, FM Radio, Brown. It’s all coming together for Microsoft and Apple is left in the dust. Again. Think different, MAC lemmings and stroll on down to Zune Marketplace—oh wait—Zune Marketplace doesn’t work on a MAC. Losers.

    Your potential. Our passion.™

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