Today in Apple history: iTunes becomes No. 2 music retailer in U.S.

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iTunespic
iTunes was going from strength to strength.
Photo: Apple

February 26: Today in Apple history: iTunes becomes No. 2 music retailer in U.S. February 26, 2008: Less than five years after launching, the iTunes Music Store becomes the No. 2 music retailer in the United States, second only to Wal-Mart.

In that relatively short period, iTunes sells more than 4 billion songs to more than 50 million customers. The rapid rise to prominence stands as a massive achievement for Apple — and for the revolutionary digital distribution model Cupertino helped pioneer.

“We’d like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone,” said Eddy Cue, Apple’s vice president of iTunes, in a press release. “We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes.”

iTunes’ rise to the top

The iTunes Music Store debuted on April 28, 2003. At the service’s launch, digital music downloads were synonymous with theft. Pirate services like Napster drove a massive trade in illegal downloads, threatening the music industry’s future.

While iTunes remained an outsider in some senses, its rapid success reassured music business execs. Apple’s increasingly popular service proved there was a new way to sell music that was suited for the digital age.

Growing large enough to challenge Wal-Mart, the biggest U.S. music retailer, was a massive achievement for iTunes.

iTunes heads toward biggest music seller

The data putting Apple in second place behind Wal-Mart came from the MusicWatch survey by market research firm The NPD Group. Because many iTunes sales were single tracks rather than albums, the firm calculated the figures by counting a CD as 12 individual tracks.

In other words, the iTunes model even affected the way the industry tallied music sales, shifting the emphasis to songs rather than albums.

Apple’s rise to the top as a music retailer did not come as a total surprise. It was clear virtually from day one that iTunes would be big. By December 15, 2003, Apple celebrated its 25 millionth download. By the following July, Apple sold its 100 millionth song. (Today, Apple has sold north of 40 billion songs.)

By the third quarter of 2005, Apple cracked the top 10 music retailers in the United States, although it still lagged behind Wal-Mart, Best Buy, Circuit City and fellow tech company Amazon. iTunes eventually became the single largest worldwide music vendor.

What was your first iTunes purchase? Let us know in the comments below.