Apple's iTunes music store has managed to overcome retail giant Wal-Mart to grab the first place in the retail sales of music. The data released by The NPD Group are based on NPD’s Digital Music Study, which is s an annual survey of US consumer’s demand, and NPD MusicWatch, that racks past seven-day music purchase habits of the US population age 13 and older.

The previous month, iTunes ranked second behind Wal-Mart. The iTunes Store became the largest music retailer in the US based on the amount of music sold during January and February 2008. Apple’s iTunes surpassed Wal-Mart, which last month had the first place.

"It underscores a very important trend in the industry," said Michael Gartenberg, vice president and research director at Jupiter Research, quoted by Reuters "It wasn't that long ago that Apple was proud of the fact that they were No. 4 and rising and (then) No. 3 and No. 2," said Gartenberg.

However, iTunes will soon have serious competition. MySpace parent company News Corp. has just announced the long-anticipated MySpace Music, an online music portal/store which will not only sell digital music, but also concert tickets and merchandise.

At first sight, MySpace's initiative would not seem too much of a threat for the well-established iTunes, now being the first music retailer in the country and all. However, one should not forget that MySpace is the leading social networking service in the country and has a massive user base which can be quickly converted into a customer base.

Overall, iTunes has sold more than 4 billion tracks since its launch in 2003, thanks in part to the popularity of Apple's iPod portable music players which are closely tied with the online store.

Last month, it was rumored that Apple allegedly is working on a new plan to bring customers closer to digital music and the iTunes Store by discussing with major music companies the possibility of offering unlimited music service in return for paying a premium for the iPod and iPhone music devices.

Apple and the record labels are tight lipped and they won't comment on the rumors. The problem which allegedly came up in the discussions is the money Apple is willing to pay record companies. As usual, the company wants to pay intriguingly little of its profits.