Apple 2.0

Covering the business that Steve Jobs built

Apple's growing slice of the music business - in pie charts

August 18, 2009: 2:50 PM ET
Source: NPD Group

Source: NPD Group

The NPD Group on Tuesday issued what at first appears to be a pair of contradictory facts:

  • Apple (AAPL) now controls the largest share of the music business, its iTunes Store accounting for 25% of unit sales in the first half of 2009, up from 14% in 2007.
  • Compact discs are still the most popular format for paid music, accounting for 65% of unit sales.

How can this be? The trick is that Apple controls the lion's share -- 69% -- of paid downloads, whereas CD sales are spread out among many players, chief among them Wal-Mart (WMT), Best Buy (BBY), Amazon (AMZN) and Target (TGT).

To see better how this works, let's put the data into pie charts:

Source: NPD Group

Source: NPD Group

Source: NPD Group

Source: NPD Group

CD Sales

Source: NPD Group

Not covered in the NPD report, of course, is music piracy, which according to a recent U.K. report accounts for roughly 18% of music downloads -- which would put it ahead of Amazon but well behind iTunes.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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