Apple`s iTunes Grows to No. 2 U.S. Music Retailer

NEW YORK (Reuters) – Apple Inc’s iTunes digital media store edgedout Best Buy Co and Target Corp to become the second-largest U.S. musicretailer, behind Wal-Mart Stores, according to data released on Tuesdayfrom tracking firm NPD Group.

Based on 2007 sales, legal music downloads now account for 10percent of music acquired in the United States, but the increase failedto offset a decline in physical CD sales, NPD said.

The amount of music purchased by consumers rose 6 percent from asurge in digital music sales. But actual spending rates across theindustry declined by 10 percent due to lackluster CD sales, droppingfrom about $44 per capita to $40 among Internet users.

About one million consumers stopped buying CDs in 2007, according to NPD.

The iTunes store now has more than 50 million customers and has soldmore than 4 billion songs, Apple said in a separate statement.

(Reporting by Michele Gershberg and Kenneth Li; Editing by Lisa Von Ahn, Phil Berlowitz)

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