Gothenburg, Sweden - Spurred by mobile music uptake, digital music sales are forecast to overtake physical sales in Western Europe by 2011, and will account for 10% of total music retail revenues this year, according to a report from Sweden-based market research firm Berg Insight.

The firm expects digital sales to offset the decline in physical sales and push the European market back into growth beginning next year.

The total European music retail market value forecasted to grow at a compound annual growth rate of 6.5%, from $11.5 billion in 2007 to $15.7 billion by 2012.

"Music enabled handsets already outsell portable music devices massively," said Berg Insight telecom analyst Hanna Hallberg.

"We expect that the handset is going to become the primary portable listening device. Once consumers are provided with unhindered mobile Internet access, these devices will increasingly be utilized for accessing online music content."

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