According to market research firm NPD, in the first quarter of 2007, Apple's iTunes Store overtook Amazon.com and Target to become the US's third largest music retailer with around 10 percent of all music sales.

Based on a survey of 40,000 people aged 13 and older, researchers calculated Wal-Mart led the way with a 15.8 percent market share. Best Buy was second with 13.8 percent, while Apple, the top online outlet, enjoys 10 percent of the total US music market. Amazon is in fourth place with 6.7 percent, while Target stores are fifth with a 6.6 percent share of the US market.

NPD said the iTunes digital music store had benefited from sales of iPods during the busy holiday season. The company counted every 12 tracks purchased online as equivalent to an album in compact disc format.

NPD analyst Russ Crupnick said that iTunes had also benefited from the slowdown in CD sales, which have been in decline for some years. "Digital continues to grow at a fairly strong clip," Crupnick said. "Obviously, physical sales have been soft this year."

iTunes Plus review