Apple retains huge lead in Q2 music player market

Apple Computer Inc. continued to lead the U.S. digital music player market in the second quarter with a 75.6 percent share, according to the NPD Group.

"Apple has done a great job of focusing consumers' attention on digital music in their products through millions of dollars in advertising," said Ross Rubin, analyst at the NPD Group, via e-mail.

But its hard to tell if Apple will be able to maintain its sizable lead as mobile phone companies continue to put out handsets with built-in music players. A number of analysts have warned that the digital music player market could go the way of the PDA (personal digital assistant), which saw growth drop off once mobile phone companies introduced smart phones, handsets with PDA functionality.

Rubin says that companies focused on stand alone digital music players should remain competitive against the mobile phone industry because their devices have greater capacity, better user interfaces, better integration with online music services, and stronger DRM (digital rights management) support.

U.S. mobile phone service providers have also hindered the popularity of using mobile phones as music players because they have been charging more for purchasing songs online than their rivals in the stand alone music player business, Rubin said. Carriers have also in some cases been reluctant to enable music file exchange with PCs via memory cards or Bluetooth, instead preferring that consumers rely on their networks for purchases, he added.

But he noted that mobile phone companies are getting better at the music business, especially in recent handset models from companies such as Sony Ericsson Mobile Communications AB, LG Electronics Inc. and Nokia Corp, indicating that the fight is still in its early rounds.

SanDisk Corp. followed Apple in the second quarter ranking with a 9.7 percent market share, according to the NPD Group, while Creative Technology Ltd. took third with 4.3 percent of the U.S. digital music player market.

The NPD Group does not include mobile phones with built in music player functions in its figures.

U.S. stand alone digital music player market in the second quarter, 2006.

Source: The NPD Group

IDG News Service

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