February 26, 2008: Less than five years after launching, the iTunes Music Store becomes the number two music retailer in the United States, second only to Wal-Mart.

At the time, iTunes had sold over four billion songs to over 50 million customers. It is a massive achievement for Apple and the legal digital distribution model it helped to pioneer.

iTunes’ rise to the top

“We’d like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone,” said Eddy Cue, Apple’s vice president of iTunes, when Apple announced the news. “We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes.”

Butting heads with Wal-Mart, the U.S.’s biggest music retailer was a massive achievement. The iTunes Music Store had only debuted on April 28, 2003. At the time that it first shipped, digital music was synonymous with music theft, thanks to pirate services like Napster which had helped drive a massive trade in illegal downloads and threatened the future of the music industry.

While iTunes was still an outsider in some senses, its success was reassuring to the music industry: showing that there was a new way to sell music that was suited for the digital age.

The figures putting Apple in second place were based on data from market research firm the NPD Group’s MusicWatch survey. Because many of the tracks sold on iTunes were single tracks, rather than albums, the figures were calculated by counting a CD as 12 individual tracks. In other words, the iTunes model had even affected the way that music sales were tallied, basing it on single tracks rather than album units.

On its way to being the biggest music seller

Apple’s rise to the top didn’t come as a total surprise. It was clear virtually from day one that iTunes was big. By December 15, 2003, Apple celebrated its 25 millionth download. By the following July, Apple sold its 100 millionth song. (Today, Apple has sold north of 40 billion songs.)

By the third quarter of 2005, Apple cracked the top 10 music retailers in the U.S., although it still lagged behind not only Wal-Mart, but also Best Buy, Circuit City, and fellow tech company Amazon. iTunes eventually became the single largest worldwide music vendor.

What was your first ever iTunes purchase? Let us know in the comments below.