Report: Apple iTunes Sales Down 65% in First Half of 2006

Authored by Mark Hefflinger on December 13, 2006 - 11:27am.

Cambridge, Mass. - Sales at Apple's iTunes Store fell 65% in the first six months of 2006, according to a survey of U.S. iTunes debit and credit card purchases conducted by Forrester Research.

The number of monthly iTunes transactions dropped 58% in the first half of 2006, while the average size of purchase also declined by 17%, the report said. Forrester couched the report's findings by noting that it wasn't clear whether seasonal sales patterns may be a factor. A majority of sales are generally transacted in the second half of the year.

Overall, 3% of online households polled by the firm have made an iTunes purchase in the past year, with buyers spending an average of $35 for the year. Half of all transactions cost $3 or less.

"Only Apple knows just how much profit there is at the end of the day on a $1.98 credit card transaction for two songs, but with transaction costs, hosting costs, and the wholesale price of the songs, there's not much margin left," Forrester said.

Related Links:
http://www.forrester.com/go?docid=40858
http://tinyurl.com/y6te9t (Reuters)
http://news.bbc.co.uk/2/hi/business/6175321.stm