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Free song @ iTunes for 8 days

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CIOL Bureau
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Duncan Martell



SAN FRANCISCO: In its first year, Apple Computer Inc.'s online music store has sold more than 70 million songs, short of its original 100-million-song target but more than anyone else, the company informed.



Apple, maker of the Macintosh computer and the wildly popular iPod digital music players, also upgraded its iTunes digital jukebox software with new features such as "iMix," which lets customers publish their playlists on the iTunes online music store, which other customers can then purchase.



"We're very, very excited about the results from the first year," Steve Jobs, Apple's co-founder, Chairman and CEO, said on a conference call with reporters, adding that the Cupertino, California-based company has sold more than 3 million iPods since it introduced them in October 2001.



"If there is a keystone here, it's iPod," said Phil Leigh, an analyst with market research firm Inside Digital Media. "As long as Jobs can maintain market share there, he has a good chance at remaining No. 1 in online music."



Apple had initially set a goal of selling 100 million songs in its first year of operating the store, but Jobs said the company was not at all disappointed with 70 million songs. In fact, the computer maker is offering a free song to customers for the next eight days to mark the store's anniversary.



"If a year ago anyone had predicted iTunes would have sold 70 million songs, they would have been laughed out of town," Jobs said. Apple now sells about 2.7 million songs per week.



"I think there's an attempt here to become a standard in digital music, like Microsoft did in PCs," Leigh said, noting that Dell Inc., which sells its own branded MP3 player, might ultimately consider reselling the Apple iPod, as rival Hewlett-Packard Co. will start doing this summer. Jobs also said that the company has no current plans to start offering a subscription-based online music service, which many of its rivals now do.



"Subscription services are not succeeding," Jobs said, adding that the iTunes music store had a "small profit" in its most recent quarter. "When you subscribe to music you don't get a chance to put it on your portable player and take it with you."



SOME RULE CHANGES



Jobs said that Apple's online music store now has more than 700,000 tracks available for purchase an increase from 200,000 when it launched the service a year ago. Tracks cost 99 cents each and about 40 percent of the music sold are in the form of albums, rather than individual tracks.



Apple has led the online music industry in the legal purchase and downloading of music, scoring agreements with all five major records label with the launch of iTunes. The iPod has nearly 50 percent of the market for all MP3 players, Jobs said, including $50 players that use Flash memory to store media.



However, Apple said last month it would delay global sales of its new iPod mini digital music player until July due to stronger-than-expected U.S. demand, due to a problem with its supplier. Apple's iPods cost $249 to $499 and can store 1,000 to 10,000 songs and use hard disk drives for storage.



The updated software also allows for automatic conversion of songs in Microsoft Corp.'s WMA, or Windows Media Audio, format to AAC, the format Apple uses for the iPod and its online music store. The software upgrade, iTunes 4.5, is available immediately on Apple's Web site for both the Mac and Windows computers.



Apple also raised the number of computers on which users can store songs bought from the online music store, to five from three. In response to requests from the record labels, however, Jobs said that Apple is reducing the number of times a user can create a CD with the same playlist, to seven from 10.



(C)Reuters

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