Despite the ever slowing digital music market, Apple is clearly maintaining its lead in the portable media player game. During the company's second quarter investor conference call on Wednesday, Apple reported 10.549 million iPods sold, coming in under analyst expectations of 10.7 million units. Compared to the December quarter's 21.06 million units, iPod sales numbers were down substantially for March.

Despite the drop in numbers, Apple appears to still be on track with iPod sales, and the company noted that it historically sees a sequential drop in the second and third quarters. Even still Apple racked up a 24 percent increase in iPod sales compared to the same quarter last year.

The iPod seems to be maintaining a healthy lead over its competition in most markets around the world. In the United States, the iPod holds 70 percent of the market; in Australia and Canada, the number comes in at 60 percent; In Japan and Hong Kong the iPod holds something under 50 percent; the United Kingdom, Switzerland and Singapore show about a 40 percent market share; and the iPod holds 28 percent of the German market.

Apple CFO Peter Oppenheimer remarked that Japan has proven to be a difficult region to increase market share in. "Japan is a very challenging market," he said. Mr. Oppenheimer added that Apple is working on strategies to improve its position in the region.

Despite reporting iPod sales below Wall Street expectations, Apple still managed to beat analyst revenue estimates to post its highest earning quarter ever. Mr. Oppenheimer commented that he "couldn't be happier with the March results."