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Wed, 13 Dec 2006 'iTunes sales are fine' – Apple speaks against silly claims

Apple has dismissed Forrester analysis which claims iTunes sales in freefall

Jonny Evans

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Apple has broken its usual silence to slam well-publicised claims that iTunes sales are losing momentum.

"The conclusion that iTunes sales are slowing is simply incorrect," Apple told Macworld UK this morning, in a statement.

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Apple was responding to claims made by Forrester Resarch analyst, Josh Bernoff, yesterday. Bernoff made the headlines with his claims that iTunes sales are declining.

As Bernoff clearly holds no accurate data on iTunes sales, he based his claim on a proprietary analysis of 2,000 US credit card statements – a US-centric focus that ignores iTunes sales in Europe, the Far East and Australia. Bernoff's analysis also ignored iTunes Gift Cards, song vouchers and other ways in which music fans purchase tracks from the service.

Bernoff's claims, which emerge just weeks after Microsoft's launch of its Zune device, prompted Apple to issue an official rebuke.

The company's statement of denial observes: "Apple is leading the digital music revolution with almost 70 million iPods sold and a stunning 1.5 billion songs purchased from the iTunes Store. iTunes sales represent nearly 6 per cent of all music sold in the US, making iTunes the fourth largest music retailer there," the company stressed.

Far from being on the way out, the company is holding its own in multiple markets, Apple's statement explains. "In the UK our market share is around 80 per cent of the legal download music market as per the Official Charts Company."

Bernoff's figures also flew against the face of a report from Akamai yesterday, which explained that over half a million internet-connected users a minute visit a digital music website somewhere in the world, mainly iTunes, at peak periods.

The online music market is expected to increase sevenfold by 2010, with revenues from music downloads and subscription services expected to top CD sales on the web by next year, according to In-Stat Research.

Other analysts observe that Bernoff has missed the point with his research. A Blackfriar's Marketing blog entry disputes the claims, and points out that the average number of songs sold per iPod is actually increasing, rather than decreasing.

"Anyone who claims iPod sales are collapsing can't do basic math," the Blackfriar's report explains. "The rate of song purchases is going to change month-to-month, and Forrester's data shows that. But the iTunes Store is the fourth largest online retailer of any type and is selling almost three million songs a day. And, of course, none of that counts revenues from TV shows or movies either, each of which amount to millions of dollars of revenue per year. If that's a collapse, I don't know what these authors consider success."

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