Apple Claims Title as No. 1 Music Seller

Who's the biggest seller of music in the world?

If you guessed Best Buy or Barnes & Noble or Wal-Mart, guess again.

Apple Inc. announced Thursday its iTunes online store surpassed Wal-Mart in January and February to become the world's biggest music retailer, based on the latest data from market researcher NPD Group.

The news isn't exactly a big surprise, given the decline of CD sales and the rise of digital music. Apple, with iTunes and its iPod players, has been gaining on brick-and-mortar stores for several years.

"It obviously speaks to the continued growth of digital sales that we've been seeing, but it also speaks to the practical total domination of that segment by Apple and iTunes," said NPD Group music analyst Russ Crupnick.

Crupnick pointed out that consumers nonetheless still buy about $6 billion worth of CDs each year, compared to about $1 billion in digital music downloads.

Neither Apple nor NPD would provide specific sales figures. March figures are not yet available.

For Apple, the timing couldn't be more fortuitous, said Phil Leigh, senior analyst at Inside Digital Media in Tampa, Fla.

Big record labels, which are growing increasingly tired of Apple's inflexibility when it comes to pricing and revenue sharing, are about to roll out a new online music service with social networking Web site MySpace that could be iTunes' biggest challenger yet.

Apple's new status as king of music retailing, Leigh said, may cause the labels to think carefully as they proceed.

"It's a wake-up call for anybody in the record business who hasn't heard all the other alarms," he said.

Apple opened iTunes almost five years ago. Since then it has sold more than 4 billion songs, most at 99 cents each. It has 50 million registered customers and claims to have the world's largest music catalog with more than 6 million songs.

BIGGEST MUSIC SELLERS

1. Apple/iTunes

2. Wal-Mart

3. Best Buy

4. Amazon.com/Target (tie)

Source: NPD Group, based on January-February sales.