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SAN FRANCISCO - APPLE Inc has surpassed Wal-Mart to become America's No. 1 music store, the first time that a seller of digital downloads has ever beaten the big CD retailers.
Apple sold more albums in January and February than any other US retailer, market research firm NPD Group said on Thursday, underscoring how the music industry is on the front edge of a digital shift that is upending media businesses from bookstores to video game makers.
'We are thrilled,' Mr Eddy Cue, Apple's vice-president of iTunes, said in a statement.
Apple has dominated the fast-growing download market, and while US consumers still buy more CDs than digital downloads, the gulf has narrowed rapidly within five years of iTunes' launch, taking the digital store ahead of CD sellers such as Wal-Mart, Best Buy and Target.
The NPD Group did not release figures on how many albums each company sold. It said it counted every 12 singles sold as one album.
It added that Apple probably got a boost during the two months by people cashing in iTunes gift cards - which Wal-Mart and other retailers also sell - that they had received during the holidays.
'It's a major milestone,' said Mr Tom Adams, president of consulting firm Adams Media Research. 'It is the first instance of an electronic venue surpassing a retail venue for any kind of media delivery.'
NPD Group analyst Russ Crupnick has further predicted that Apple's swift rise to music industry power would not stop. 'If you look at what is happening to the CD and the growth of the digital side, it's a pattern that is going to hold,' he said.
The music industry has been rocked much harder by the digital transition than television, movies and other entertainment media.
Analysts say that is because CD burners make it possible for anyone to create playlists of favourite songs, hastening the shift from albums to singles.
Portability due to devices such as Apple's iPod also makes going digital a natural transition for many people.
Apple's iTunes store created an online business model for a music industry that was struggling with plummeting CD sales and online piracy.
In addition to selling albums, iTunes offered thousands of individual songs for 99 US cents (S$1.40) each, which proved ideal for customers wanting to buy hot singles or old favourites without buying the whole album.
The gamble worked with TV channels as well, prompting many networks like CBS to put many of their shows on the Internet and sell them through iTunes and other download stores.
Mr Quincy Smith, president of CBS Interactive, said he believed the DVD market was not going to vanish any time soon, but the network could cater to a different demographic segment by offering shows through iTunes and Wal-Mart alike.
'I think it's a sign of things to come, if you believe in evolution,' he said.
LOS ANGELES TIMES-WASHINGTON POST
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