The popularity of the iTunes Store has vaulted Apple to the number two music retailer spot in the US, according to market research firm NPD. For the full year 2007, Wal-Mart remained king of the hill, while Best Buy came in third and Target fourth.

Conventional retailers have increasingly seen CD sales suffer as more and more customers have shifted to online sources for music. According to NPD, that trend continued throughout last year with 48 percent of US teens not purchasing a single CD in 2007, compared to 38 percent in 2006. Meanwhile, Apple says 50 million customers have bought over 4 billion songs, with 20 million sold on Christmas day alone.

Not everyone leaving the CD market will go the iTunes route, though. The company still has to face strong competition from Amazon MP3, which offers higher-quality, lower-priced non-DRM MP3s, and automatic loading into iTunes. Not to mention stronger support from all four major labels.