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Wed, May 07, 2003 - Page 12 News List

More than million songs sold in Apple store's first week

BLOOMBERG , CUPERTINO, CALIFORNIA

Apple Computer Inc, which last week started an Internet store where users of its personal computers can buy music from the world's top five record companies, said it has sold more than 1 million songs.

More than half were purchased as albums, easing recording industry concerns that selling music on a per-track basis would reduce album sales, Apple said in a statement.

Apple said it also received orders for more than 110,000 units of the new version of its iPod portable music player, unveiled along with the Internet service on April 28.

"In less than one week, we've broken every record and become the largest online music company in the world," chief executive Steve Jobs said in the statement.

Jobs has helped turn Apple around by focusing on PC design and software tailored for tasks such as managing digital music and photos. He is relying on new products to spur demand at a time when many users see little reason to buy new computers.

The online store offers more than 200,000 songs to Apple users for US$0.99 each.

It differs from rival Internet music sellers such as Listen.com Inc's Rhapsody and Pressplay that charge monthly subscription fees of US$10 for unlimited downloads and additional fees of about US$1 to copy songs onto compact discs.

Enthusiasm for Apple's new products typically swells soon after they are released, making it tough to determine how much the music store will add to sales and profit yet, analysts said.

"It's hard to draw any conclusions based on one week," said Andrew Neff, an analyst at Bear Stearns & Co. who rates the shares "peer perform."

Rivals have struggled to attract customers while music is still freely exchanged on file-sharing services such as Kazaa.

There are more than 40 Internet sites that sell individual songs, Listen.com spokesman Matt Graves said. Listen.com has tens of thousands of subscribers, he said.

"We're happy that Steve Jobs is bringing attention to online music," Graves said. "But he's only selling to, what, 2 percent of the market? We'll settle for the other 98 percent."

Apple's music store is currently available only to US users of Apple computers.

The company accounted for about 3 percent of US PC shipments in the last three months of last year and 2 percent of the market worldwide, according to IDC.

Apple plans to make the music store available to Windows users by year's end and is negotiating with record companies to sell music to customers overseas.

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