The Apple Store doesn't really 'dominate retail' - it's a flagship strategy.
They're #1 in sales per square foot, but they only have 250 in the US stores at 6-8K square feet per store. A 'Whole Foods' with $1k/square foot, but at 40K square feet on average, will do a little better, and they have 500 locations in the US.
So I think 250 stores x 8K size x $5k/sq foot is $10B a year, very good, but a tiny fraction of their sales. Let's say it's 2x that globally for $20B meaning about 10% of their sales. Ultra rough ballpark.
So they do really well, but it's still a flagship channel.
I would certainly say they are dominating. Try comparing an apple store to a Microsoft or Linux store...oh wait, you can’t. Considering that they are selling a product that is very accessible online and at other retail locations...they ARE dominating that space.
when I walk by the Apple Store in the same location, there's easily 20x (often more) the number of customers roaming around.
The only time I've ever seen a reasonable number of people in a Microsoft Store, it was the one in Bellevue, Washington — the city next to Redmond, for those of you not familiar with that city.
Most of the time when I see Microsoft Stores, they're empty except for two or three husbands killing time playing games while their spouses shop.
The best way to gain a hold into a market that already has many players is to make all products available easily under yours and add some values your competitors can't provide (convenience, simplicity, single-point of access and purchase).
Some people are willing to pay a bit more for that, and once you grow big enough, you can put pressure on the content providers to accomodate more of your requests.
And you could also start being a content provider yourself and add some exclusives to your established userbase to retain them.
Not sure if you ever saw the early versions, but the Macs only took up a small part of the store - most of the space was non-Apple gear.
With media, I expect the same change could happen - or it could simply be like music, where Apple's dominance drove the business.
Either way, if Tim Cook is focused, this will be huge (but probably not on day 1).