The carriers’ combined market share shrank to 4.9% last year as Apple solidified its lead

Source: Verizon Wireless

Songs streamed directly to cellphones, once touted as the next big thing in digital music, failed to take off and is now rapidly losing ground to Apple’s AAPL iTunes Store.

That’s the conclusion of a survey in the May 22 issue of Billboard. Based on interviews with distributors representing roughly 90% of the total market, Retail Track columnist Ed Chrisman put together the chart posted below the fold. Among the highlights:

  • Apple, which passed Wal-Mart WMT in 2008 to become the U.S.’s No. 1 music retailer, widened its lead in 2009 — to 26.65% of the domestic music market, up from 21.42% in 2008.
  • The combined efforts of Verizon VZ , AT&T T , Sprint S , T-Mobile DT and mobile content provider Zed accounted for 4.9% of sales, down from 6.6%. And that includes ringtones.
  • Amazon AMZN and RealNetworks RNWK gained share — to 7.07% and 1.23%, respectively — but have a long way to go to catch Apple.
  • MediaNet, which serves Microsoft’s MSFT Zune and others, is practically a round-off error, with 0.55% of the market, down from 0.66%.

Below: The Billboard chart.

Source: Billboard

[Follow Philip Elmer-DeWitt on Twitter @philiped]