The iPod is losing its grip in Japan. Last week, for the first time in four years, the iPod was not the #1 selling music player in Japan. Instead it was Sony’s Walkman digital player. Sony’s music players increased to a 43 percent share, while Apple was at 42.1 percent share. Apple held its lead in Japan since January of 2005.

One thing to keep in mind is the iPhone. The iPhone has become extremely popular in Japan and according to BCN, it has cannibalized iPod sales. It’s one of the factors not taken into consideration when BCN did their research.

Apple will probably take that lead back once they release their new iPods next week but Sony’s market share shows that Apple still needs to come up innovative products to maintain their lead in the music player department.

(Via CrunchGear)