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It's all about the iPod

New surveys credit Apple with overwhelming market share and brand recognition, but competitors may find success at the low end of market.

Despite increasing competition, Apple's iPod still rules the digital-music world, according to new reports from market researchers.

Research company The NPD Group said in a report released Tuesday that various versions of the iPod accounted for 92.1 percent of the market for hard drive-based music players, up from 82.2 percent a year ago. Players from Creative Technology and Digital Networks North America's Rio were a distant second and third, with 3.7 percent and 3.2 percent of the market, respectively.

NPD analyst Stephen Baker attributed the results to a strong launch for new fourth-generation versions of the iPod, which arrived on the market just at the right time to dominate back-to-school buying.

"Back-to-school has turned out to be a very big season for music players," Baker said. "In my day, you had big speakers and a bunch of components you had to lug to your dorm room. Now it's a six-ounce device."

The iPod Mini, the smaller 4GB version of the player Apple introduced last year, continues to sell well, Baker said, but Apple faces credible competition there from new devices such as Rio's Carbon.

"The mini market is where we're likely to see a lot more competition," he said. "People buying 20GB music players probably have a good idea what they're going to use them for. The mini players are more of a casual market, and that's where you're likely to see competition based on pricing, form factor and compatibility with music stores."

Competitors will have to contend with daunting brand recognition, however. In a recent survey of buying preferences among U.S. teenagers, analyst Jeff Klinefelter of Piper Jaffray found a strong preference for the iPod over competing products. Of the 600 teens surveyed, 16 percent already owned an iPod, and 24 percent planned to get one within the next year. Only 8 percent planned to acquire another brand of music player in that time.

Another recent Piper Jaffray survey found that the iPod was the fourth most-requested Christmas gift among U.S. high school students, trailing clothes, money and cars.