iTunes has become the seventh largest music retailer in the US, competing with high street music stores.

New research from the NPD Group shows iTunes climbing from last year’s fourteenth place to become as powerful as most music stores on the high street, and predicted the service would edge out more stores by the end of the year.

The iTunes Music Store beat out Tower Records, Sam Goody and Borders in NPD's third quarter ranking to crack the top ten for the first time ever, the research claimed. iTunes’ fast ascension to seventh place reflects the speed at which users are turning to music online.

"With the growing interest in digital music, forecasts of more iPod demand this holiday, plus the stocking-stuffer appeal of iTunes gift cards, we can expect Apple to increase its share even more by year's end," said Russ Crupnick, music and movies industry analyst for the NPD Group, in the report.

In September, Apple revealed it has sold more than 600 million songs and has over ten million iTunes account holders. The company yesterday confirmed it has sold over 30 million iPods since the product launched in 2001.

NPD Group ranked the iTunes Music Store against traditional retailers by counting 12 songs per album to compare online sales with physical CDs and singles.

Wal-Mart retained its first place ranking as the top music seller, followed in order by Best Buy, Target and, all of which held onto their previous spots, according to NPD. For Your Entertainment leaped to fifth place from tenth, and Circuit City dropped one spot to sixth.