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January 31, 2008, 1:47 pm

iTunes: Now No. 2 in streaming media

picture-74.pngApple’s (AAPL) iTunes passed RealNetwork’s (RNWK) RealPlayer in November 2007 to take the No. 2 slot in streaming media players, according to a new report from WebSiteOptimization.com.

Although Microsoft’s (MSFT) Windows Media Player is still No. 1, with nearly a 50% market share, its growth has leveled off over the past year.

In fact, iTunes is the only one of the big four players, including Apple’s own QuickTime, to show positive growth lately. (see chart) As the report puts it:

Growing at an annual rate of 26.8%, iTunes hit a high note while the rest of the band was flat. (link)

RealNetworks was a pioneer in streaming media, having introduced its first player in 1995. Its market share might not be stagnating if it weren’t so hard these days to find the free “basic” player on its website amid all the 14-day trials.

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Philip Elmer-DeWittSilicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
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