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Death of iTunes becoming real?

You can never celebrate a long term victory in the sea of internet. It’s not so long ago when everyone loved iTunes and it looked like the only possible way of music distribution. Few months later and there are messages popping in, asking whether iTunes dies slowly. Forrester Group recently presented the results of a 3 months study about digital music sells on Apple’s iTunes, and the conclusions don’t look that good for the Cupertino-based company. According to the cited statistics, since January this year the number of iTunes transactions made each month has slumped 58 percent, while the average size per purchase has registered a downfall of 17 percent, leading to a 65-percent overall drop in monthly iTunes revenue, U.S. market research group Forrester said in a survey among North American consumers.

Apple’s music download service is now dominating the market, following the massive success of the tiny iPod. AppleTV shows and movies were sold through iTunes since its launch. The decline indicated by the Forrester analysis comes after a period of strong growth. The number of monthly iTunes transactions grew sevenfold, from just over two transactions per 1,000 households in April 2004, to nearly 17 during January 2006. Over that period, the average transaction size almost doubled, to $6.69 from $3.55. “Only Apple knows just how much profit there is at the end of the day on a $1.98 credit card transaction for two songs, but with transaction costs, hosting costs, and the wholesale price of the songs, there’s not much margin left,” Forrester said. declared that over 1.5 billion music tracks and tens of millions of

So to sum this up, still extremely successful, but iTunes had already better times. And it can get worse: iTunes and the iPod are now facing Microsoft’s new rivals, Zune and Zune Marketplace. Zune MP3 player is also touted as the “iPod-killer”, and according to market research it debuted as No. 2 music gadget in November, after the iPod. Microsoft hopes to sell 1 million Zunes by the end of June, 2007…


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  1. maik
    December 13th, 2006 | 20:29

    music is free :D

  2. December 13th, 2006 | 20:34

    well… yeah :)

  3. December 13th, 2006 | 21:46

    i wonder what the stats for allofmp3 are in comparison

  4. bonecrushr78
    December 13th, 2006 | 22:01

    still, iPod mad successful, i read an article saying amazon sold more iPod power adapters than the zunes themselves…

  5. Dominik
    December 14th, 2006 | 00:03

    Nice article. I like the last sentence though: “Microsoft hopes to sell 1 million Zunes by the end of June, 2007″…

    That’s funny. Apple sold 50 millions in 4 years :)

  6. Choke Point
    December 14th, 2006 | 00:47

    Anyone who thinks that one month’s poor (in comparison) sales equates to the death of iTunes is basically flaunting their naivety.

    At the end of every period of growth there is in general a slump of some sort, and once other factors are considered the picture looks bright for Apple i.e after the festive period most consumers will have more disposable income.

    Personally I’ve never even considered purchasing any type of digital media, although I have owned an iPod video since they were released

  7. lanker
    December 14th, 2006 | 01:39

    the zunes awful

  8. eta873
    December 14th, 2006 | 02:24

    The Zune isn’t a threat at all. The only advantage the Zune has is it’s self proclaimed “ground-breaking” Wi-Fi connection that allows one to “share music.”

    You can only play the song that you transferred from your friends Zune THREE TIMES before it automatically gets deleted. Furthermore, it takes a while for the actual transfer to go through (120 solid seconds of standing there and holding your zunes to transfer 1 song is pretty long).

    I agree with Choke Point; this is just a slump. I’m no Apple fan, but they’re excellent marketers, and, aside from the Zune, there’s no formidable opponent to challenge its domination over the digital media market.

    And if Microsoft, a multi-billion dollar corporation and leader in software development, can’t produce a better player/music store, I highly doubt any other company can.

    Creative gave their best shot, Samsung is ok, and Sony is going straight downhill from their rootkit and battery recall excursion.

  9. kot markiz
    December 14th, 2006 | 05:36

    You dont need produce better music store at all. They already exist. Personally I am using Beatport. And list grow up.
    About players? SanDisk launch new series of its Sansa mp3 Players. Waithing list (preordered) on particular models in USA till February. Size about iNano but with nice display 2-4gb + slot for extra microSD card. Same price. No restriction, no hook up with servises. Esay control and great sound quality. I ordered one from Buy.com. So it mater of time
    for changes in Market. But Aplle will be ok anyway for awhile.
    Most peeps hard to get in somethings new even they ripped tottaly of their money or just want to be like other. Peace to all.

  10. YeahRight
    December 14th, 2006 | 15:33

    Ah yes, Macworld, that paragon of objective journalism.


    Quoting Macworld to ‘prove’ some even remotely negative article about Apple is wrong is like quoting an MS press release to ‘prove’ that Windows is secure.

  11. Night Rider
    December 15th, 2006 | 11:47
  12. xXx
    December 17th, 2006 | 18:30

    Why is it that every discussion about such products end in personal attacks and bad arguements. If You really care that much about nvidia vs ati, ipod vs. zune and intel vs. amd then u need to get a f-ing life

  13. Jimbo von Winskinheimer
    January 10th, 2007 | 01:50

    Now, don’t you feel stupid for posting the results of the Forrester Group “study” (i.e. stats pulled out of someone’s arse), knowing that the original article is complete bunk? Announced today, iTMS has sold over 2 billion songs. Song purchases from iTMS are GROWING, not shrinking. Uh oh, guess that Forrester isn’t so good at research, eh?

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