With new online music retailers springing up to challenge its Net dominance, Apple’s iTunes Store moved the goalposts again Thursday. It announced its store has overtaken even Wal-Mart as the number-one music retailer in the U.S. — online or off.

The new designation is based on info during January and February from the NPD Group, a market-research firm. NPD’s MusicWatch survey compiles unit purchases in a given week.

Physical CD Sales Drop

According to news reports, Apple now has 19 percent of the market and Wal-Mart, including both its online and brick-and-mortar sales, has 15 percent. Best Buy took third with 13 percent, and Amazon, which has launched a music store to compete with Apple, is fourth at six percent. Target, plus with six percent, is fifth, followed by FYE/Coconuts, Borders, Barnes & Noble, Circuit City, and Rhapsody.

Apple’s move to the top of both the real and virtual worlds of music retailing is a milestone not

only for the Cupertino, Calif.-based company, but plus for the industry. Physical CD sales have been plummeting as the industry tries to adjust to the new digital reality. In fact, NPD reports that nearly half of all teens in the U.S. didn’t buy even one physical CD in 2007, up from 38 percent in 2006.

But it’s not just the real-vs-virtual ratio that is radically changing the music industry. There was a 10 percent decline in overall music spending in 2007.

Michael Gartenberg, an analyst with industry research firm JupiterResearch, said the new position for the iTunes Store “demonstrates the remarkable shift that has taken place in the music industry.” He noted that that shift not only means an increasing role for online distribution, but the “reinvention of the one.”

Four Billion Songs

The new claim to fame for Apple’s store comes as it faces new competition. Apple said…

Orginal post by Top Tech News