Apple Inc. (NASDAQ: AAPL) is not only making a killing with its hardware (ala iPhone), but its App Store boasts 60,000 downloadable applications and is the largest on the planet for any wireless device. But the software part of the Apple entertainment ecosystem -- iTunes -- has not had much attention in quite a while.
Here's one thing: how about 25% market share for all music -- physical and downloaded -- in the U.S.?
Apple's iTunes was the seminal part of the iPod and iPhone universe that allowed Apple hardware and software to combine into a seamless experience, and one that has not been enjoyed nearly as fully by any company other than Apple. But, a 25% market share for all music sold in the U.S.? Apple has never produced a CD, ever. Its entire sales catalog is digital. So, with that in mind, the 25% share becomes even more impressive.
Wal-Mart Stores Inc. (NYSE: WMT) is still first in the physical music sales department with a 20% share. But, sales of CDs are expected to continue declining year after year, even after holding its own during the first half of 2009. As retail shelf space for music shrinks, will retailers replace music and DVD sales?
Not likely. Whether we like it or not, digital delivery of much of our entertainment is happening, and it will only increase. That will mean less foot traffic into retail stores, but increased traffic to online stores for music and, increasingly, movies. Brick-and-mortar retailers beware.
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