THE launch of the South African version of iTunes last week did not appear to worry local entertainment retailers. Some even said it would actually provide a boost to sales, despite offering cheaper prices on music and movies.

Apple launched its popular online store in SA last Tuesday, at the same time as in Russia, Turkey, India and 52 other countries.

An Apple spokesman said the store would give customers more than 20 million local and international songs to download from as little as R6.99 a song (or R69.99 an album), as well as movies from major studios like Sony Pictures Home Entertainment and Warner Bros.

When news of the launch broke, a social media user speculated: "Apple might have killed Musica today."

"Apple's new iTunes has killed Musica, now [that] they have local music on their stores," tweeted another.

Musica has only just managed to pull back from the brink, according to parent Clicks Group's latest annual report. The retailer posted 36.3% growth in operating profit for the year to August, compared with the previous year's 40.2% decline - caused by a steep drop in CD and DVD sales.

The turnaround was effected by "the ongoing right-sizing of the brand" and the closure of 14 stores, among other cost controls. The retailer plans to close another 14 stores.

But Musica marketing manager Moenieba Abrahams welcomed the iTunes launch.

"We are certain this online music store will stimulate our country's music industry and music lovers alike," said Abrahams. "iTunes was always available in South Africa, just not legally until now."

Users have previously found loopholes in the system, allowing them to create a US account and buy iTunes vouchers to make purchases on the store from local merchants.

"The official launch in South Africa sits comfortably with our expansion into entertainment-related products such as headphones, portable speakers, [and] docking stations," said Abrahams. "In fact, since we're the largest stockist of headphones in this country, our brand will complement iTunes as more customers will be inspired to accessorise their music systems."

The Clicks annual report showed Musica gained 31.6% in the technology category, which included digital accessories, headphones and portable speakers.

"The technology offering was extended to create a further 27 technology concept stores," said Musica GM Reg Bossenger in the report. "Technology and accessory sections were rolled out to the remaining Musica store base."

Another retailer, Naspers-owned, which offers music and movies online, was more measured in its response.

"We at Kalahari will continue to do our best to satisfy our customers, which includes a wide selection and competitive pricing," said Bill Paladino, CEO of Naspers subsidiary MIH Internet Africa.

It is not possible to determine how much Kalahari contributed to the entertainment and media holding company as it is bundled in with other internet businesses.

Look & Listen, which has both physical and online retail presences, did not respond to requests for a comment.

Reliable Music Warehouse, which caters to the low- to medium-income market, welcomed the increased competition, which it said is "a good thing and helps keep us on our toes".

"In recent years, Reliable Music Warehouse has still been selling the cassette format," said Sydney Naidoo, its marketing manager. "There is still much need for the physical disc in SA compared to the rest of the world. Yes, digital is what some people are looking for, but the South African market has two markets - the high-income and the low/medium-income markets."

* This article was first published in Sunday Times: Business Times