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The iPod and iTunes giant gets a bit confused about its current market position

Since last February, Apple has constantly proclaimed itself the number 2 music retailer, second only to retail giant Wal-Mart.  Apple had long trailed Best Buy for the third spot, and the February announcement that it had passed Best Buy took on a celebratory note.  Such a position was certainly respectable stated observers, and thanks no doubt, to Apple's rejuvenated iPod sales from its refreshed line.

However, something strange happened when a memo from the NPD group music survey was intercepted by Ars Technica.  The memo read that Apple was really number 1, having passed Wal-Mart and Best Buy.  So which was it?  Apple, well known for its sardonic "Mac and PC guy" ads, certainly did not seem the type of company to purposefully miss a chance to toot its own horn, so to speak.

Well it appears some confusion overtook Apple, as it released a statement saying that it was actually number 1 in January and February, contradicting its own previous report.  Stated Apple last week:

Apple® today announced that the iTunes® Store (www.itunes.com) surpassed Wal-Mart to become the number one music retailer in the US, based on the latest data from the NPD Group*(see footnote).

*(footnote) Based on data from market research firm the NPD Group’s MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions. The iTunes Store became the largest music retailer in the US based on the amount of music sold during January and February 2008.

Many observers believe that Apple's new lead was thanks in part to heavy holiday sales of iTunes gift cards. 

Apple's announcement is likely an attempt to drum up some excitement to overshadow the recent deal between MySpace and three of the major music labels to release an iTunes competitor.

Why do the announcement and the confusion preceding it matter?  Chiefly, the confusion certainly induces a bit of havoc upon investors and analysts who tend to rely heavily on such announcements to make their decisions on stocks.  Secondly, it indicates that Apple missed a major advertising opportunity to promote its new found dominance, thanks to some snafu.

Despite the humorous nature of the situation, online music is no laughing matter for Apple.  Apple has worked hard to hold onto its 70 percent stake in the MP3 market. And with the number of teens -- the primary music buyers -- not buying a CD rising from 38 percent to 48 percent between 2006 and 2007, all indications are that if you want to succeed in the music business, you are going to have to succeed online.

This is the second embarrassing logistical oversight from Apple in the last month.  At the end of the last month it was revealed that Apple's iTunes software had unintentionally encouraged massive violation of Apple's Safari browser's EULA, possibly millions of times, by encouraging non-Mac hardware users to download the browser.



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RE: Engage!
By Brandon Hill (blog) on 4/8/2008 11:53:21 AM , Rating: 4
No doubt. I absolutely LOVED that show as a kid.

Make it so!


RE: Engage!
By Mitch101 on 4/8/2008 3:08:18 PM , Rating: 2
Now if we could get them to drop the ego's and overinflated demands they have for being in a star trek movie.

EGO > Star Trek Movie Pay = Unemployed

Unemployment pays < Star Trek Movie Pay

Too many of them seem to like being unemployed instead of making money from a movie.


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