Apple's iTunes store continues to be the top music retailer, with 28 percent of all music purchased by U.S. consumers, a 4 percent increase since Q1 2009, according to The NPD Group.

Amazon increased its music market share 3 percent to tie Walmart for the second spot at 12 percent. Sales of digital tracks and albums accounted for 40 percent of overall music market share in the first quarter of 2010, which is a five percent increase since Q1 2009.

"Amazon's growth reflects a stronger position in both the CD and digital formats," said Russ Crupnick, vice president of industry analysis for the NPD group.

"This dual-pronged approach of selling both digital music and CDs helps attract the most valuable and committed music buyer who prefers access to both formats."

iTune's share of digital music downloads has remained somewhat flat since Q1 2009, growing just one percent but still dominate with 70 percent of the digital music market. AmazonMP3 grew 4 percent to reach 12 percent, while its share of the CD market grew 2 percent to reach 11 percent.

In NPD's review of CD retailers, Walmart led U.S. CD purchases in Q1 2010 with 17 percent share of retail market. Best Buy followed Walmart with 14 percent, Amazon's 11 percent share positioned it in third place.

"Unfortunately the decline in U.S. CD sales means that selection and merchandising of the physical CDs is suffering, which is one of the primary reasons consumers say they purchased CDs less frequently," said Crupnick.

"Online shopping offers consumers who still want CDs more variety than they would get in a brick-and-mortar store; plus, recommendations, and other interactive features that raise the overall value proposition for music buyers. "