There had been music stores before but Apple packaged it all up with a price-per-song ($0.99) that broke such things out of the geek niche and into the mainstream. The iTunes Store has become a huge success, making billions of dollars for Apple, diversifying into movies and books, and is now the biggest music retailer in the world.
Personally i don't buy many songs from it, i prefer to buy CDs and rip to iTunes that way but for the odd song and digital only release it works very well. Part of the success of the store has been to help encourage and tie many customers to Apple's hardware too and with over 25 billion songs sold to date there are a lot of people now tied into the system.
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