Apple's Outside Chance

Just how do you translate "iPod" into Chinese or Hindi?

That may be the question that Apple Computer (AAPL) is pondering as it looks to expand sales of its popular digital music player. Its position in the U.S. dominant, but that means iPod sales growth is tied to the growth of the market here.

Outside the U.S., though, the company owns just a small portion of the game. With the growth of that market expected to outpace the domestic arena, Apple could continue to post outsized sales growth for years to come -- depending on how well it convinces overseas consumers that the iPod is as hip to have in China or India as it is in the U.S.

Here, the iPod has been a runaway success. Last year, nearly 73% of the digital music players sold at retail in the U.S. were iPods, according to NPD, up from 56% in 2004. The company's nearest competitor last year, SanDisk(SNDK), held just 7% of the market.

But success outside the U.S. has been limited. Research firm iSuppli, for instance, estimates that Apple's share of the worldwide market for digital music players, in terms of units shipped, was 24.9% last year.

Because it measures sales at different points in the supply chain, iSuppli's numbers aren't necessarily compatible with those from NPD. But combining the two sets of figures indicates that Apple had roughly 16.5% of the digital music player market in terms of unit sales last year.

An Apple representative did not return a call seeking comment.

Although the U.S. market is growing at a rapid clip, the market outside the country is growing even faster. Retail unit sales of digital music players in the U.S. grew 170% last year, according to NPD, but worldwide shipments grew by nearly 270%, according to iSuppli.