MP3 players have been chewing away at CD sales for a number of years now. I still know a few people who buy them instead of downloading because they want the case with the graphics and liner notes and whatnot but other than that, there aren't many compelling reasons to go out and purchase a CD in my opinion. I haven't purchased one in almost a year thanks to online retailers and more recently, Zune Pass. I saw this story today on PhoneScoop.com that I beleive will be the final nail in the CD's coffin.
"Flash memory maker SanDisk is teaming up with the recording industry to offer music on microSD cards. The plan is to put new music, ripped at 320 Kbps complete with liner notes, videos and other extras, onto 1GB microSD cards and sell them at music retail stores as well as locations such as Wal-Mart. The microSD cards will also come with a small USB reader so they can be inserted into a computer. The songs will not be protected by DRM, so they can be moved between phones and other devices. The new format will be called slotMusic. EMI Music, SONY BMG, Universal Music Group, and Warner Music Group are all participating in the new venture, and all parties involved plan to have slotMusic titles available by the holiday season."