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Last Updated: Wednesday, 13 December 2006, 10:34 GMT
Apple denies download sales fall
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Apple says the iTunes store has sold more than 1.5 billion songs
Apple has denied a report which claims US sales at its iTunes Music Store fell by 65% in the first half of 2006.

Research group Forrester said it was too soon to say whether its findings showed that buyers were "reaching their saturation level for digital music".

Apple said the report is "simply incorrect", but will not divulge iTunes financial figures.

Forrester said Apple users may be put off since iTunes songs can only be played on iPods or via iTunes itself.

This means that they cannot be used on rival digital library systems or music players.

World number one

Forrester said it got its figures by analysing 2,791 US iTunes debit and credit card purchases conducted by members of its consumer panel.

While overall US sales at the iTunes Music Store were down 65%, the number of monthly transactions had declined 58%, while the average size per purchase had fallen 17%, Forrester said.

Apple's iTunes Music Store is the world's most popular legal online music download store, which Apple says has now sold in excess of 1.5 billion songs, and tens of millions of TV shows and movies.

While Apple does not give separate financial data for the store, it has said that it made a profit in the three months to the end of September.

"Only Apple knows just how much profit there is at the end of the day on a $1.98 [1] credit card transaction for two songs, but with transaction costs, hosting costs, and the wholesale price of the songs, there's not much margin left," said Forrester.

Industry wide fall?

Forrester's report added that the entire legal music download market made up just 4% of US music sales last year, still trailing way behind CDs.

While Apple may be seeing a decline in music download sales, its iPod music players remain extremely popular.

Apple recently said that it sold 8.5 million iPods in the three months to the end of September, a 35% increase on the same time last year.

Recent separate figures from fellow research group Nielsen Soundscan have suggest that all music download services have seen flat or declining sales since the start of this year, not just the iTunes Music Store.

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