Despite being the leading digital-music player, Apple's iPod has yet to achieve dominance in the sector, reports claim.

The BusinessWeek article suggests that Apple has "hyped" the figures, going on to suggest the company has claimed 40-50 per cent of the market share of all MP3 players, while analysts say it has just 25 per cent.

BusinessWeek says "the iPod's global market share may actually fall well below the 25 per cent mark".

Apple admits its market-share figures refer only to the US, Japan and Western Europe markets; adequate tracking data does not exist for other markets.

BusinessWeek suggests that one way to derive marketshare information is to get data about the components that go into digital-music players.

The report explains: "According to one of those chipmakers and to industry analysts, worldwide shipments of digital-music-player chips hit about 15 million last year. An April, 2004, a report from investment bank CIBC on this market estimated global sales of flash and hard-drive music players at 17 million. If that's true, then the 1.5 million iPods sold in 2003 gives Apple 8 per cent to 10 per cent of the global market. In fact, SigmaTel alone sold 9 million chips specifically designed for rival digital-music players, dwarfing iPod sales."

The report concludes that Apple's iPod will continue to sell well: "I'm fairly certain that Apple will sell more than 800,000 players in the next holiday season. Indeed, a hot Christmas run could easily double that number and put iPod sales over the 4 million mark for 2004. That would amount to a global market share topping 12 per cent."

But it adds: "While Apple's is the biggest single player in both the domestic and global markets, it remains far from dominant. Further, the surprisingly high sales numbers for digital-music players outside the US implies that Apple will be facing tougher competition in the not-so-distant future, as it ramps up to sell iPods where competitors are on much stronger footing.

"Particularly in Asia, where size really does matter, Apple might have trouble selling its larger and more expensive iPods against rivals with smaller devices."