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iTunes outsells traditional music stores

Apple's download business now among top 10 music retailers, research company says, beating out both Tower and Borders.

Apple Computer's iTunes music store now sells more music than Tower Records or Borders, according to analyst firm the NPD Group.

The research company tracks downloads from digital music stores, as well as people's purchasing habits at offline retail stores. During the past three months, iTunes made it to the U.S. Top 10 sales list for the first time, NPD said.

"Taking their growth and others' pain, it's not inconceivable to see them cracking into higher ground in the foreseeable future," said NPD music and movies industry analyst Russ Crupnick.

The benchmark is a meaningful sign in digital music's steady progress--and Apple's domination of that trend--toward becoming a significant part of the overall music business.

According to figures from the Recording Industry Association of America, digital sales accounted for slightly more than 4 percent of the market during the first half of 2005, up from about 1.5 percent during the first half of 2004.

Apple's iTunes has maintained more than 70 percent of the PC-based digital music download market throughout 2005, Crupnick said. That market share is likely to climb slightly when Macintosh customers are added in, but NPD does not track those purchases, he said.

For its comparison, the company compared 12 separate song downloads at iTunes to a single album purchase at an ordinary retail store. Using that measure, iTunes scored higher than Tower, Borders and Sam Goody.

Wal-Mart, Best Buy, Target, Amazon.com, FYE and Circuit City all scored higher than iTunes, NPD said.