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I think Apple made the right choice
Authored by: natecook on May 15, '06 10:07:30AM
Don't want to get into a big argument, so just a couple quick points here:

1) iTMS sells its songs in AAC format, not MP3 -- AAC is still lossy, but is a much more complex and superior codec. (In other words, a 128kbps AAC file and a 128kbps MP3 file are the same size, but the AAC will sound better).

2) AC3 is not lossless -- lossless codecs can't get anywhere near the file-size-savings that made MP3 popular and are needed for iTMS or other online stores. From the Dolby Wikipedia article:
Dolby is part of a group of organizations involved in the development of AAC (Advanced Audio Coding), part of MPEG specifications, and also considered the successor to MP3. AAC outperforms AC-3 at any bitrate, but is more complex. The advantages of AAC become clearly audible at less than 400 kbit/s for 5.1 channels, and at less than 180 kbit/s for 2.0 channels.

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