Wal-Mart ( WMT) launched a music download system aimed squarely at undercutting Apple's ( AAPL) iTunes service, but the category-killing retailer is still a long way from matching its would-be rival's scope.

At 88 cents a song, Wal-Mart's Music Downloads is cheaper than iTunes, which charges 99 cents. But the current Fortune 500 No. 1 has some distance to go to match Apple in diversity of artists, with a library skewed toward tastes of the discount chain's core rural and suburban clientele.

In a release trumpeting the launch, Wal-Mart highlighted exclusive songs from the likes of Jessica Simpson, 3 Doors Down, and Shania Twain, and said it had an exclusive distribution agreement with country label Curb Records covering more than 3,000 songs.

By contrast, Apple -- which also sells the iPod digital music player -- said last week it has sold 50 million songs over iTunes since setting up the service last April, with downloads running at 2.5 million a week for an annualized pace of about 130 million. The company sold 730,000 iPods in the December quarter.

Apple was the first legal download service to put agreements in place with all five of the major music companies and currently lists 500,000 songs. It has separate deals with 300 independent labels and exclusive tracks from more than 150 artists.

Still, encroachment by Wal-Mart on any segment of retail often bodes ill for existing distributors. The company said the launch of its new service followed a four-month trial and will be supported by an "awareness program" at its ubiquitous retail outlets.

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