iTMS Downloads Likely to Hit Half a Billion By June, But Growth is Levelling

Apple today announced their expansion of the iTunes Music Store into Denmark, Norway, Sweden and Switzerland, further consolidating their already impressive European footprint, and bringing the global store total to 19. Apple has led the way in defining a global digital music consumer experience, which of course is essential so that it mirrors the uniform iPod experience. The Scandinavian and Swiss markets though, are an important part of the puzzle. These are among Europe’s most sophisticated digital markets (see our Digital Life Index for more details) and whilst absolute numbers are smaller than Europe’s big markets (UK, France, Germany) general digital adoption rates are significantly above average.

Apple also reported cumulative global sales of over 400 million tracks on ITMS (407.8 million by my calculations). At that rate it will hit the half a billion mark in June, which is an impressive number by any standards and shows continued strong dynamic sales. However, when you plot the weekly download evolution, a leveling out has occurred following a very significant increase in January. The launch of the new European stores should drive some increase in the monthly download rate as pent up demand for the sophisticated Nordics and Swiss is met. But that aside, the ‘levelling out’ trend hints at the pivotal role that the iPod plays in ITMS, with the surge in monthly downloads occurring after strong Q4 iPod sales. This re-emphasizes the point that digital music sales remain the poor relation of digital device sales. As I said in one of my previous reports the role of a download store such as IMS is primarily a differentiating value add for the device, similar to a walnut dashboard in a car. i.e. you won’t buy a car because you want a walnut dashboard, but the walnut dashboard may well influence your decision on which model you buy.