iTunes, number 2 with a bullet
I have an iPod, an iPhone, an Apple TV, and I manage all my music with iTunes as I am sure many, many other people out there do as well. Why do I mention this? Because some of my purchases (and yours too) contributed to making the iTunes Store the second largest music retailer in the US (according to NPD data) in 2007. That's right, iTunes is second only to Wal-Mart in sales of music (though the iTunes Store does lack those greeters that make shopping at Wal-Mart so pleasant).
Let's take a moment to reflect on this. Less than 10 years ago the idea that the second largest retailer of music wouldn't have a single brick and mortar store would seem ridiculous. Today, it is a reality and digital distribution can only get bigger. We're living in the future, I tells ya.
Apple also mentions that people downloaded over 20 million tracks on Christmas day alone. iTunes does face some tough competition (I'm a big fan of Amazon MP3), but the ease of use and integration with the iPod/iPhone really makes the iTunes Store a force to be reckoned with.
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