iTunes is #1 retailer

An important milestone has been passed as for the first time an on-line retailer has taken first place in a major product category, as Apple has surpassed Wal-Mart to become the top music retailer in the US.

But success inevitably brings increased competition:

Apple Inc. said the iTunes online store, not quite 5 years old, has become the nation's leading music retailer, surpassing music sales at the world's largest retailer, Wal-Mart Stores, Inc.

Also Thursday, MySpace.com said it would expand digital music offerings on the social networking site to include three major labels—Universal Music Group, Sony BMG and Warner Music Group—to go along with the numerous indie labels that already offer music on MySpace.

That means two of the Web's biggest players—MySpace, the top social network, and Amazon, the top online retailer—will try to chip away music sales from iTunes. Amazon launched digital music sales late last year.