A report by the NPD Group shows that Apple (AAPL) has now become the third largest music retailer in the U.S. in the first quarter, passing by Amazon.com to reach the milestone. The company now owns 10 percent of the market, while Amazon.com's (AMZN) fourth place spot comes with a 6.7 share.
This only confirms again the growing interest in digital music by U.S. consumers and the decline of interest in CDs.
The industry leaders are still Wal-Mart (WMT) in the No. 1 position with a 15.8 market share, and Best Buy (BBY) coming in at No. 2 with a 13.8 market share. The survey included 40,000 people over the age of 13.
Amazon may start to increase share as it just last month started up a digital online store that doesn't include DRM.
For the first quarter Nielsen SoundScan reported that music CDs were down by 20 percent, a trend that will continue; one of the reasons for Apple iTunes fast growth. Apple also started up a premium service last month that offers higher quality songs without protection for a higher price.
No matter how you measure and look at this, it's a phenomenal accomplishment by Apple. To come from out of nowhere and take a 10 percent market share in the music industry - or any industry - in this short of time is extraordinary.
Wal-Mart and Best Buy will continue to be big players in the short-term, but the CD will still drop in sales for some time to come.
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