Apple Whistles a Happy 3 Billion iTunes
07/31/07 - 02:03 PM EDT
Daniel Del'Re
Apple (AAPL Quote - Cramer on AAPL - Stock Picks) has passed another milestone in its continued dominance of the digital music world, a plank from which it hopes to reach buyers of its Mac computers and iPhone handsets.
On Tuesday, the company announced it has sold over 3 billion songs from its iTunes online music store. Apple's a la carte model has proven to be the most popular with consumers who generally prefer to pay for songs individually, rather than paying subscription fees to services such as Napster (NAPS Quote - Cramer on NAPS - Stock Picks) and Rhapsody. Shares of Apple lost 4.6% to $136.85 midday. The iTunes catalog contains over 5 million songs, 550 television shows and 500 movies. Perhaps most importantly, Apple offers not just the downloading service but also the hardware for managing music collections. Its wildly popular iPod gives it an advantage over longtime rivals like Napster, as well as newcomers Amazon.com (AMZN Quote - Cramer on AMZN - Stock Picks) that only sell the downloading service, but not the listening device. "Apple controls the software on PCs, they have the downloading service and they have device all under their control," said Gartner analyst Mike McGuire. "They've made it brain-dead simple to buy, download and move content around onto iPods, computers and now iPhones." Analysts refer to this as the digital music "ecosystem," which comprises the hardware, software and downloading service. Each plays a role in giving Apple a leading share of the digital music world, and a growing share of the entire music market that comprises compact discs as well as digital downloads.
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