Boston Herald: iTunes Sales Tanking

The Boston Herald reports a problem in Apple country. iTunes sales are down 65 percent, according to Forrester Research, suggesting that as the iPod itself goes from strength to strength, few care about the music store so often identified as the driving force behind sales.

Noting that the average iPod owner buys less than two dozen songs, the claim is that iTunes, like other Apple software, amounts to a loss-leader for hardware sales.

“... with transaction costs, hosting costs, and the wholesale price of the songs, there’s not much margin left. Apple’s profits come from manufacturing trendy, well-designed hardware, not by reselling digital audio.”

Apple's response: the report is hooey. “Simply incorrect,” said Apple spokeswoman Natalie Kerris.

Report: Apple iTunes sales plummeting [Boston Herald]