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Thu, 03 Jan 2008 iTunes dominates online

iTunes continues to eclipse Zune music service

Gregg Keizer, Macworld edit, Computerworld (US online)

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Apple's iTunes service accounted for 0.68 per cent of all internet visits on Christmas Day, statistics claim.

Hitwise claimed traffic - presumably beefed-up by the number of iPods under the tree this season - absolutely eclipsed traffic to Microsoft's Zune website, which took 0.09 per cent, marking a tripling of interest in the recently-revised product.

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The Zune was in short supply before Christmas, creating the impression that demand in the second-generation of the device was high. Research firm iSuppli, however, pinned the shortage on Microsoft: "Given the widespread criticism of the first Zune model, it is likely Microsoft erred on the side of caution when placing initial orders for the new Zunes," said Chris Crotty, iSuppli's senior analyst for consumer electronics, in a statement before Christmas.

A rival research company, The NPD Group, also downplayed the idea that Zune shortages meant something. Although the Zune's share of sales increased to around 6 per cent in November from less then 2 per cent in the same month during 2006, NPD analyst Stephen Baker said not to read anything into out-of-stock talk: "That could be anything," he said, "including behind out for a day or two. And [online] retailers typically keep smaller inventories anyway, because that's their business model."

"The Zune was up a lot in November in comparison to last year," noted Baker, citing data that NPD pulls primarily from brick-and-mortar retailers but also from a smattering of online sellers. "iPod sales were down a little bit, but not enough to be disconcerting [to Apple].

"The fact is that the MP3 player market is considerably slower this year than in the last couple of years," Baker continued. "The market is slowing, since most people who want one have one. A lot of sales now are upgrades."

And though the relative success of Zune is welcome news to Microsoft, it is much too little to be crowing about when considering the big picture. Zune has a long way to go just to take second place, Baker noted. "Their midterm goal is to be number two," he said. "Then they have to find some way to attack Apple and the iPod."

Apple's music-player line accounted for approximately 58 per cent of all units sold during November, Baker said. SanDisk, the current second-place US seller, accounted for about 16 per cent of unit sales.

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