December 15, 2003 2:49 PM PST

Apple hits 25 million iTunes downloads

Apple Computer has nearly doubled sales of digital music through its iTunes music store since launching a Windows-compatible version of its iTunes software in October, the company said.

Cupertino, Calif.-based Apple said Monday that customers have downloaded a total of 25 million songs from iTunes since April, when the online store opened, with 12 million songs purchased during the past two months alone.

Apple has been widely credited with sparking a boom in sales of downloadable music following the music industry's crackdown on illegal Internet file-swapping services such as Kazaa and Napster. Unlike its no-pay-to-play predecessors, the iTunes service charges 99 cents per song.

iTunes' rapid growth has exceeded some analysts' expectations. "This really underscores the pace at which people are accepting legitimate online music distribution," said Phil Leigh, senior analyst at Inside Digital Media.

iTunes customers download an average of 1.5 million songs from the service per week, said Apple Vice President of Application Marketing Rob Schoeben. Apple expects that customers will download 100 million songs by the first anniversary of iTunes' launch next April.

Apple executives are "blown away" at the rate at which people are purchasing songs at the company's store, Schoeben said. "You normally have a launch spike, and then you see it taper off," Schoeben said. "We're not seeing that. We're adding more and more accounts. We're not seeing people trying it and then going away. What we see in the numbers is that they're getting hooked."

Though Apple makes very little money on song sales, iTunes helps fuel sales of the company's iPod digital music player, Apple executives have said. As of October, the company had sold 1.4 million iPods, and it expects the device to be a popular holiday gift this year. Apple has introduced electronic gift certificates and a section of the iTunes site that showcases holiday music, both of which should further boost holiday-related sales, Apple said.

Apple has a 70 percent share of the legal music download market, and Digital Insight's Leigh predicts iTunes' sales this year will be at least five times that of all the legal competition combined. But competition is expected to grow. In addition to Musicmatch and the recently revived Napster, iTunes rivals may soon include Microsoft and Wal-Mart. Microsoft and digital music services provider Loudeye said on Monday that they're teaming up to help companies create new online music services based on Windows technology.


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