Scottsdale, Ariz. - Propelled by the global expansion of broadband, expanding music catalogs and mobile music downloads, digital music sales will account for 40% of the total worldwide music market by 2012, up from 10% in 2007 and 6% in 2006, according to a report offered Wednesday by market research firm In-Stat.

The firm also projects that revenue from worldwide full-track mobile downloads will reach approximately $4.2 billion by 2012.

By comparison, sales of online digital music were $3.05 billion in 2007, up 48% from 2006.

"Digital piracy continues to represent the primary challenge to online music service providers," said In-Stat analyst Stephanie Ethier.

"Other obstacles still include the lack of interoperability between services and devices due to differing digital rights management (DRM) technologies, and weak consumer demand for subscription-based services."

The In-Stat report is also bolstered by one released earlier this week from fellow market research firm NPD Group, which found that Apple's iTunes Store surpassed Wal-Mart to become the top music retailer in the U.S.

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