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Apple iTunes sales tally passes 350 million

Half a billion downloads by June?

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Analysis Apple yesterday revealed its iTunes Music Store has now sold more than 350 million songs worldwide since it opened its doors to US consumers in April 2003.

The latest figure, mentioned last night during the Mac maker's Q2 FY2005 earnings conference, represents an increase of 50 million or so songs since the company said it passed the 300 million mark, in March.

The increase is in line with The Register's own predictions, and if Apple continues selling songs at this rate of growth, it's on its way to passing the billion-song mark before the end of 2005. We reckon that will take place in the November/December timeframe, passing the 500 million mark in June/July.

Right now, the growth looks exponential, but increasing competition may yet dampen it down. There's no sign of that yet, and Apple's statement that it sold more than 5.3 million iPods during the quarter takes ITMS' potential customer base to 15.33 million, based on the quarterly figures Apple has published to date. With 50 million songs sold in the last month, they're buying, on average, 3.3 songs a each every month. Over the next couple of months, that amounts to almost 152 million songs, enough to pass the 500 million song mark in July. And that assumes growth is linear - and slower than it actually appears to be.

This is the most basic of financial models, of course, so don't read too much into it. But it does show that Apple's digital music strategy has more legs than iPod hardware sales. What Apple isn't revealing, of course, is the number of ITMS customers who regularly purchase music - ITMS' equivalent of the Napster subscriber. That figure is likely to be well below the iPod owner tally, but probably higher than Napster's subscriber base of 410,000 or MusicNet's total number of subscribers, 500,000.

The closer Apple's regular-customer total gets to those figures, the more each individual is spending per month, and the more they are spending above the level a monthly subscription might come to - and the more revenue Apple's pay-per-download model is generating than a subscription package would.

If Apple has 500,000 regular buyers - a very conservative estimate, we'd say - that's roughly 100 downloads a month for each of them. So each is paying around $99 a month - rather more than the $15 they'd pay for an equivalent Napster To Go subscription. Of course, it the ITMS customers stop paying, they still have their songs, unlike NTG subscribers, so the comparison isn't entirely direct. But it does suggest that ITMS customers are happy spending more, and do spend more - which is good news for Apple's shareholders. ®

Related stories

Apple financials rude with health
Major labels sell off MusicNet
Apple Japan 'will' open Music Store - chief
Napster users sharing passwords to save cash
Apple eyes broader iTunes services
Apple faces iPod, iTunes patent violation claims
Apple music store downloads top 300m

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