March 15, 2004 2:45 PM PST

Apple's iTunes sales hit 50 million

Apple Computer said Monday that it has sold 50 million songs through its iTunes Music Store, with about 2.5 million songs being downloaded each week.

Apple said the sales figure excludes the number of songs downloaded through a promotion with Pepsi, in which 100 million songs are being given away. It has been reported that the specially marked Pepsi bottles that contain iTunes codes have been slow to reach store shelves in some areas. Customers have also found a way to determine which bottles are winners, by tilting the bottles at a particular angle.

Apple CEO Steve Jobs announced a goal of distributing 100 million songs by April--including those given away in the Pepsi promotion--when the company expanded the iTunes store in October to work with Windows-based computers. Apple reiterated the goal in December, when it announced that it had sold 25 million songs by that point.

In its announcement Monday, Apple did note that iTunes users are now downloading 2.5 million songs per week, which means that the company is now selling songs at a rate of 130 million per year.

"With over 50 million songs already downloaded and an additional 2.5 million songs being downloaded every week, it's increasingly difficult to imagine others ever catching up with iTunes," Jobs said in a statement.

In an interview Monday, Apple Vice President Rob Schoeben focused on the fact that Apple continues to hold a substantial lead in the music download market, despite the increased competition.

"People were predicting we were going to be in a horse race against all these scary competitors," Schoeben said. "This doesn't feel like a horse race. From our perspective, we are the dominant leader in that market."

Apple also noted that the rate of sales is increasing, now at about 2.5 million songs per week, up from a rate of 1.5 million downloads per week in December. The company was selling about 500,000 songs per week in September, when the service was still Mac-only.

As for the goal, Schoeben said it was hard for Apple to know the pace at which the market would develop and that the company has had to learn through experience about how quickly (and how many) songs would be redeemed through a promotion like the one with Pepsi. He declined to say how many songs have been redeemed from the promotion.

Despite being the leader in online music stores, Apple does face increasing competition from existing stores such as Roxio's Napster and MusicMatch, as well as a host of others looking to join the fray, including Microsoft and Virgin.

Meanwhile, Roxio said Monday that strong demand for Napster was leading the company to raise its sales forecast. The company said it now expects revenue for its Napster division to increase to about $5.5 million for the three months ending March 31. That compares with $3.6 million in the preceding quarter.

In February, Roxio said it had sold 5 million downloads, a fraction of Apple's tally.

Schoeben noted that Napster is finding a profitable niche in selling music subscriptions but that it's not grabbing a significant share of the download market.

"Subscriptions are a place they can hide and get a comfortable niche," he said. "Their ability to sell music has not borne out."


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Check Your Facts CNET
It would be nice if CNET actually researched their stories, insteading of grabbing headlines. Apple clearly states that the 50 million song rate DOES NOT include those from the Pepsi promotion.

If you factor those in, how close do they come to their mark, CNET?

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Posted by (2 comments )
Reply Link Flag
negative spin
Oh well... CNET always succeeds to give a negative spin on
almost every Apple related story. I was wondering what they
would come up this time. And if they can't find something, then
they just 'adjust' the news a bit.

I like reading CNET for general technews, but the favoring of
Microsoft and on the other hand the negative biassing of Apple
makes me wonder about their objectivness.
Posted by zwats (8 comments )
Link Flag
Jobs stated that Pepsi tunes was part of way to 100 milion
Go to the Apple website, to the quicktime area and then watch
the webcast for the Oct. 16, 2003 event at which the 100 million
goal was announced. Steve Jobs states that the Pepsi giveaway
is part of the way they hope to get to 100 million.
Posted by ces1965 (4 comments )
Reply Link Flag
Cnet "falters on the facts"
Can't you guys even read a press release correctly?
Posted by (3 comments )
Reply Link Flag
Just look at the author...
He can't even spell his own name right...

"Ina Fried" = Ian Fried.
Posted by (2 comments )
Reply Link Flag
Holy Smokes, give em a break!
Your both right. Apple HAS NOT yet released the Pepsi numbers and probably won't until the giveaway is over at the end of March and so looking at their released numbers right now Apple is far below their goal. However, Jobs did state that the goal INCLUDED the Pepsi giveaway numbers and so as long as that's going well I would expect them to announce meeting or exceeding their goal at the end of April. As for the "negative spin" on Apple products I just don't see it.
Posted by (6 comments )
Reply Link Flag
Okay the original headline was "Apple Falters on iTunes Goal," now they've changed that after public outcry that they're riding Apple with misrepresented facts (headline now reads, "Apple falling short of iTunes goal"). My question to you is, if that's not proof enough then what is?

Your comments of "giv'em a break" should apply equally to Apple as to Cnet's misreporting the story. Why can't Cnet just write a story saying Apple's sold 50 million tunes on iTunes Music Store and either be done with it or tag along that they expect to come close to their goal of 100 million once the Pepsi Promos are counted. But Noooooooooo, Cnet has to make it sound like Apple is "faltering" (used from the original headline). To me frankly, that's discriminative-yellow-journalism. Not sure how you could really read it otherwise.
Posted by (3 comments )
Link Flag
faltering all the way to the top, eh??
Despite the changed headline, the story remains the same...
Holy cr*poly, if Apple is faltering in their efforts to sell legit music online, then everyone else must be complete losers, at least if one compares ACTUAL performance in the market. I agree with those who say Apple has suffered from years of total ineptitude in tech-reporting by opinionated journalists who really don't know what facts are, especially relevant facts. Unfortunately, these ill-informed 'voices' have often influenced readers into believing many myths about Apple, most of which are just wrong. Thank God for the creative minded adventurous consumers who listened to their own mind, and having once tasted Apple, never looked back.
Posted by (2 comments )
Reply Link Flag
Fixed, but...
Well, the story's been fixed to be pretty unbiased now, but it
shouldn't have been biased in the first place. Most readers can
draw their own conclusions about the 50 million sold and the
100 million mark, whether positive or negative, but CNET
doesn't have to dictate "Well, this is very bad for Apple." Take a
look at the closest competitor, which is a mere 45 million
Posted by iKenny (98 comments )
Reply Link Flag
Does the correction propagate to MSNBC?
The original "Apple Falters on iTunes tally / Company is far
below its goal" headline still appears on MSN's MSNBC News site
as of 5:18PM Pacific.

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As MSN presumably has a significant audience, it will be
interesting to see if and when the update gets there.
Posted by gracion (4 comments )
Link Flag
50 million sales and still no profit?
50 million sales and Apple doesnt make a profit from this, apart from the iPod sales. Looks to me theres something definitely wrong with this business model.

To really compete with P2P and to get the online music business going we need low priced services that can offer all music by all artists and labels in multiple formats.

The business model of the Russian service is an example for all other services. They somehow can offer all music without copy protections. You can even choose format from MP3 to WAV. That's the way to go IMHO.

Another example is Weblisten a Spanish service that is already selling a million songs per month and is making a profit.

Somehow you never read anything about these services in the US press, though they both accept US customers.

I dont know if it is legal for people outside Russia or Spain to subscribe to these services, but it is sure worth to take a look at how they deal with online music.
Posted by (2 comments )
Reply Link Flag
See my response below about selling iPods....
Posted by wayne.p (2 comments )
Link Flag
Er, Ah, "facts tinkerers" you guys can put my original post back -
Just another example of your spineless journalism. Editing
unwanted user comments regarding your weak journalism skills.

Why have the ability to "give" feedback when you guys edit out
the ones you don't appreciate. Great "quasi-open forum" you got
Posted by (3 comments )
Reply Link Flag
They are selling music to sell iPods....
Apple said they aren't selling music to make money. They stated
that the reason everyone else is going to fail is because there is
no profit in it. Apple's motive is to sell music so they can sell
more iPods. That was the whole point so I don't understand why
everyone just doesn't get it. So every other retard trying to
make a profit is just kidding themselves... There is no money in
selling the music.

Apple is a HARDWARE company! This is so they can sell more
Posted by wayne.p (2 comments )
Reply Link Flag

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