Apple Inc. (NDAQ: AAPL) has reportedly surpassed Wal-Mart Stores Inc. (NYSE: WMT) to become America's largest music store by sales.

According to market research firm NPD Group, Apple's iTunes digital store sold more albums in the first two months of this year than any other music retailer. Though consumers still buy more physical music in the form of CDs than the digital song files that iTunes sells, iTunes has been able to vault ahead of Wal-Mart because it dominates the music download market – even though the music download pie is smaller, iTunes has such a big slice that it has overtaken all individual CD sellers.

This announcement is not so much immediately important for Apple's or Wal-Mart's profitability as it is symbolic – the fact that the biggest music retailer doesn't sell CDs or have physical stores signifies the transformation the music industry has undergone in the past decade.

Port Washington, NY based NPD Group computed the figures by counting every 12 individual songs sold as one album, which is absolutely key to the claim that iTunes sold more albums than any other retailer because in reality few iTunes customers purchase complete albums.

In the long-run, this news is much more significant for Apple than Wal-Mart because Apple's results are far more dependent on iTunes and its complimentary digital music players, iPods, than Wal-Mart's results are dependent on CD sales. Though Apple doesn't release specific results for iTunes – probably part of a strategy to prevent music companies from complaining about its profitability – if downloading music is now officially the standard, Apple could not be in a better position to capitalize on it.

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