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Merrill Lynch analyst Steven Milunovich's comments, reported in MacMinute, follow yesterday's announcement of an agreement between Apple and Motorola that will see a mobile version of iTunes on Motorola's mobile phones.

'Although we expect Motorola music phones to have 0.5GB of memory for songs by the end of the year, this is a different market from the 4GB iPod mini or 20 and 40GB fourth-generation iPods,' he said. 'Getting users to try iTunes on their cell phone

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introduces them to portable music the Apple way.'

And it appears that Sony's new player - the snappily titled Network Walkman NW-HD1 - does not look to be the threat many expected. The Wall Street Times review [subscription required] concludes: 'While the new Sony is smaller than the iPod and has much better battery life, it is markedly inferior overall. It has a confusing, complex user interface that makes it hard to use; weak software for the PC; an oddball music format that makes loading it with songs tedious; and a companion music download service that offers less than Apple's. The iPod wins this round, and remains champion.'

Which leaves Apple strongly positioned to benefit most from Jupiter Research's forecast that digital music sales this year will be double the 2003 level, reaching $270mn. Jupiter predicts that this will increase to $1.7bn by 2009, but concludes that, 'While digital music will return the U.S. music industry to growth after four years of steeply declining sales, digital music still will not replace CDs or bring music sales back to its 1999 peak.'