ITunes No. 3 music seller

LOS ANGELES - Apple Inc.'s iTunes online store was the third-largest overall music retailer in the United States, leapfrogging ahead of and Target Corp. in units sold, a market research firm said Friday.

ITunes had a 9.8 percent market share in the first quarter, ranking behind Wal-Mart Stores Inc.'s 15.8 percent and Best Buy Co.'s 13.8 percent, according to The NPD Group. Online retailer's share was 6.7 percent, slightly ahead of Target's 6.6 percent, NPD said.

The firm counted every 12 tracks purchased online as equivalent to an album in compact disc format, said Russ Crupnick, NPD's vice president.

NPD's survey does not include mobile music sales, nor does it factor in revenues.

Apple's rise in the NPD survey reflects a key shift in the music industry: Compact disc sales are declining while digital music sales are climbing. That, plus the popularity of Apple's iPod portable music players, has helped boost iTunes sales.

Still, digital music represented less than a quarter of total music units sold during the quarter, NPD said.

"Digital continues to grow at a fairly strong clip," Crupnick said.

When digital music, CDs and other formats are combined, overall music sales as of the end of May are up 14 percent over the year-ago period, Nielsen SoundScan said.