If Wishes Were iPods

How popular is the iPod? How about the iTunes Music Store?

Insanely popular.

You already knew that, of course. But I've got a few sources of both subjective and objective data to share. First of all, since subjective data is so much more fun, let's look at Amazon's new feature, the Most Wished For list in electronics. Here's what it looks like right now as I write this:

1. Apple 20 GB iPod M9282LL/A
2. Apple 4 GB iPod Mini Silver M9160LL/A
3. iTunes $15 Prepaid Card
4. Philips DVP642 DivX-Certified Progressive-Scan DVD Player
5. Apple 40 GB iPod M9268LL/A
6. Linksys WRT54G Wireless-G Router
7. Creative Zen Micro 5 GB MP3 Player Black
8. Canon EOS 20D 8.2MP Digital SLR Camera with EF-S 18-55mm f/3.5-5.6 Lens
9. Canon EOS 6.3MP Digital Rebel Camera with Lens 18-55MM Lens
10. Monster Cable iCarPlay iPod Wireless FM Transmitter (AI-IP-FM-CH)
11. Canon PowerShot A95 5MP Digital Camera with 3x Optical Zoom
12. Apple iPod In-Ear Headphones (M9394G/A)
13. SanDisk 256 MB MP3 Player Red
14. Verbatim 8x 4.7 GB DVD+R Spindle (100 Discs)
15. Sony Cybershot DSC-T1 5.1MP Digital Camera with 3x Optical Zoom
16. Canon PowerShot S410 4MP Digital Elph with 3x Optical Zoom
17. Kodak CX7300 3.2 MP Digital Camera
18. Altec Lansing INMOTION Ipod Portable Speaker System
19. Belkin TuneDok Car Holder for iPod
20. Creative MuVo Micro N200 512 MB MP3 Player (Black)
21. Apple iPod Dock Kit (M9602G/A)
22. Belkin Pro Series USB 2.0 Device Cable (USB A/USB B, 10 Feet)
23. Apple AirPort Express with Air Tunes (M9470LL/A)
24. Sony MDR-EX71SL Fontopia Headphones with Closed Type Design
25. Canon Powershot SD300 4MP Digital Elph Camera with 3x Optical Zoom

Today, iPods and iPod accessories fill 9 of the top 25 slots. I've counted the iTunes Music Store card, since it's a pretty safe bet that almost everyone using the iTunes Music Store regularly either has an iPod or will be getting one soon. Other closely related items didn't count because they are not exclusive to the iPod: the AirTunes base station, the USB 2.0 cable, the headphones.

Just a few days ago, the same list showed 13 of 25 items that were iPod-related. The only MP3 player on the list at that time was the Creative Zen Micro 5GB, sliding in at number 22.

So there are a lot of people out there wishing for iPods. By Amazon's wish list metric, more people want iPods than want digital cameras, DVD players, TiVos, wireless networks, or any other MP3 player. You should definitely keep in mind that this is an entirely subjective and arbitrary sample; practically speaking it's meaningless, but I found it interesting anyway.

iTunes Music Store Sales

Want some real data? I've got that too. Not about the iPod, but about the iTunes Music Store. As I pointed out above, the popularity of the iTMS should generally track the popularity of the iPod pretty well. They are marketed together, and combined they provide a lot more functionality than either one alone.

How well is the iTMS doing? Apple does not release specific numbers about how many tracks the iTunes Music Store sells at any given time, but they do make press releases when they hit certain milestones. Here they are:

• April 28, 2003 - Launch
• May 5, 2003 - 1 million
• May 14, 2003 - 2 million
• June 23, 2003 - 5 million
• September 8, 2003 - 10 million
• December 15, 2003 - 25 million
• March 15, 2004 - 50 million
• July 11, 2004 - 100 million
• October 14, 2004 - 150 million
• December 16, 2004 - 200 million
• January 24, 2005 - 250 million

Here's what that looks like on a chart:

A strong exponential growth trend is clearly visible. This trend has actually been obvious since July 2004, and every data point since then has followed the same path. Graphing the data on a logarithmic scale makes that even more clear.

The growth is almost a flat line against the log scale. I'd say it's probably flattening out slightly, but it's hard to say for sure. One argument against that is that we're currently getting data points more often, so we could just be seeing seasonal fluctuation that we didn't have the resolution to see before.

But one thing is clear: even in the flattest period we've seen, iTMS total sales are still increasing exponentially, at an astonishing rate of about 14% per month. At times it's as high as 26% per month. That's anywhere from 500% to 1000% growth per year.

iTMS to hit a billion in 2005

If this keeps up -- and the January 24th press release follows the trend exactly, and gives no reason to suggest it will stop -- then the current growth rate suggests that Apple will sell its one BILLIONTH song through the iTunes Music Store by the end of 2005. And that's actually a pretty conservative statement.

It only took ten months for the sales to increase tenfold from 10M to 100M tracks. If it takes the same amount of time to go from 100M to 1B, the store would reach 1,000,000,000 tracks sold by the beginning of May. Unbelievably, that's less than four months away.

My personal impression of the data is that the growth rate is slowing a bit, and it'll reach a billion in September or October 2005. But we'll see what the future holds.

Other music services

So how are all those other music stores doing? Not so well.

The IFPI reported last week that over 200 million songs were legally downloaded in 2004, compared to 20 million in 2003. If both these numbers and Apple's are considered accurate, and if they are measuring roughly the same data set, then we can actually get some idea about the market share of the iTMS.

(For the sake of this discussion, I'm going to assume both sets of numbers are both accurate and consistent, even though they might not be perfectly so. I'm inclined to believe Apple's numbers. They should be capable of very accurate tracking and are subject to shareholder lawsuits if they misrepresent their sales. The IFPI has no reason to be inaccurate, but neither would it be held accountable if it got any numbers wrong. I don't know whether they are measuring the same data; Apple is probably counting free downloads that don't generate revenue, and the IFPI might not be. Apple is probably also counting every track, including audio books, while the IFPI release was only interested in digital music -- however, I doubt that audio books are more than a drop in the bucket of Apple's sales.)

The IFPI's numbers state that over 220M songs have been legally downloaded and purchased over 2003 and 2004, which just so happens to extend back through the lifetime of Apple's iTunes Music Store. Well, Apple just reported on December 16th that it had sold 200M songs over the lifetime of its store. If Apple has really sold about 200M of those 220M songs, that gives them a market share of more than 90%.

To put it in perspective, these two sets of numbers suggest that everybody else added together has sold about 20M songs over the entire lifetime of their stores. Apple sold more than twice that number in just the past month, selling 50M in the period from Dec 16th to Jan 24th.

When you read an article like the IFPI's release about the explosive growth of "legal downloading", they really mean "the iTunes Music Store". Because honestly, that's where all the action is right now.