A top market research firm is backing Apple's iPod to triumph over its rivals in the the MP3.

"The market is now Apple's to win,” Forrester Research said in its report into digital-music downloads, Downloads save the music business.

The researchers claim: “Music labels are in trouble, and it's not from file sharing. To tap into $2 billion in new revenues, they must let people find, copy, and pay for music on their own terms."

The group spoke with 1,000 online consumers in the US. They claim 31 per cent of these consumers already download music and burn CDs often – up to 8-10 times per week. They also found this group accounted for 36 per cent of all music CDs sold.

Music sales continue to decline. The music business blames music downloads for this, but Forrester says: “It's the economy that's causing the malaise, not downloading.”

Official music download services, such as Pressplay and MusicNet, don't “match the music Bill of Rights”, the researchers claim. They believe paid music downloads will “restore sales growth in 2004”, as 39 per cent of music sales will be downloads in five years time, the researchers claim.

In future, labels will concentrate on promotion and accounting systems, while film studios will discover opportunities in peer-to-peer digital movie sharing. To foster market acceptance the labels will offer consumers a one-off contract to sign to enable “unfettered” music downloads, the researchers claim.

Forrester adds: “Apple did almost everything right with its original iPod MP3 player, including elegant design and great marketing. But there was a huge flaw – it only worked with Macs.”

With the launch of iPod for Windows, Forrester sees a winning endgame for Apple: “Apple now has an iPod that will connect to MusicMatch software on PCs. The MP3 market is now Apple ’s to win.”