According to NPD MusicWatch, when it comes to the unit-sales volume of music sold at retail – including paid digital music downloads and CDs – Apple iTunes leads in the U.S. with 25 percent of music units sold, which is up from 21 percent in 2008 and 14 percent in 2007. Walmart (including Walmart, Walmart.com, Walmart Music Downloads) remains in second position with 14 percent of music volume sold at their stores and Web sites with Best Buy ranked third.
This is where we are starting to see the trouble of Apple's dominance in the market. Competition is important. Competition drives innovation. Apple, of all companies needs competitors. But the dominance in the market of iTunes and the iPod/iPhone is killing it. I want the Palm Pre to succeed on the merits. I want Amazon to be a killer digital music store (it's on the way). I believe Apple's products and store ecosystem are best-of-breed right now. But they can be beat. What is scaring me most about the current state of the digital music market is that before long, the most creative among us may just stop trying.