Report: iTunes Music Store coming to Japan this year

Apple is planning to launch a version of its iTunes Music Store in Japan during 2005, Japan's Mainichi Shimbun newspaper reported on Wednesday.

Japan is Apple's largest international market and the iPod music player dominates local sales rankings, despite competition from local brands such as Sony Corp. and Toshiba Corp., but the reluctance of copyright holders to fully embrace online music sales has stymied Apple's plans for a local music store to date, the newspaper said.

Apple did not respond to several requests for comment.

The Japanese market is changing fast and online music sales are starting to pick-up. There are at least eleven music download sites in Japan but they offer files encoded in Microsoft Corp.'s Windows Media system or Sony's ATRAC3 system, which match the majority of player models on the market but are not compatible with Apple's iPod.

Apple has yet to announce any solid plans for the launch of the service. One crucial piece of information that will be anticipated by prospective users is song pricing. Japanese services typically charge between ¥160 and ¥320 (US$1.50 and $3) per track. The price is determined by the record label and is some way from the $0.99 per song that Apple charges users in the U.S.

Pricing could be important to success of the service since local users have an alternative to illegal downloading should they want to get a song without buying the CD. In Japan rental of CDs is legal and the latest releases can be rented for a few hundred yen and copied at home.

The popularity of the iPod means Apple has a significant potential market in Japan.

For the week of March 28 to April 4, Apple held four of the top five positions in the digital music player ranking provided by Nikkei Market Access. The ranking, which is calculated from point-of-sales system data at major electrical retailers, listed the 4GB version of the iPod Mini as the most popular player followed by the 512MB and 1GB versions of the iPod Shuffle and the 6GB iPod Mini. The fifth most popular player was a Rio 256MB flash player from Digital Networks North America Inc.

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