I still have a portable CD player that I'm not about to trade in for an MP3 player. MP3 didn't quite buy me over with its audio quality and the iPod-supported Advanced Audio Coding (AAC) does not have as much content behind as does MP3. And AAC comes with a convenience-hampering variety of digital rights management (DRM).

IDC predicted last year that not many consumers think like I do. Falling price points, increasing availability of legally downloadable music and the integration of compressed audio into a wide variety of devices will drive sales of compressed audio players to grow at 20 percent CAGR and reach $58 billion in revenues by 2008. And In-Stat estimates the market will reach 104 million units by 2009, up from 27.8 million units in 2004. According to In-Stat, revenue for the players has reached $4.5 billion last year—an increase of almost 200 percent over 2003.

Closer to home, China's domestic compressed audio player market reached 4.28 million units or $420.7 million in 2004, according to the report "China Industry Outlook: Consumer Electronics." The report, to be released next month, predicts this market to grow at a CAGR of 63 percent in terms of volume and 46 percent in terms of value during 2004-2007.

The interest in portable digital audio has understandably increased. So much so that not only is Nokia embedding the player in some of its new mobile phones—the N91 has 4GB disk space for storage of songs—but the company has joined forces with Microsoft to support certain digital media formats, including Windows Media Audio (WMA), Windows Media DRM 10 and the MPEG AAC family of codecs in Windows Media Player via a plug-in.

Even Sony, which true to tradition, only used to support a proprietary codec, has recently chosen to let MP3 files play on its devices. Not only will the company's new devices support MP3, but firmware upgrades for some of their older models are also expected.

While there is clear market dominance by MP3, WMA and AAC codecs, there has been a flurry of activity to develop new techniques and entirely new codecs. Spectral Band Replication (SBR), invented by Coding Technologies, reconstructs higher frequencies in the decoder based on an analysis of the lower frequencies transmitted in the underlying coder. It extends MP3 to MP3Pro and AAC to AACplus or High-Efficiency AAC, new codecs that result in smaller audio files. Parametric audio coding reduces file size by separating the audio signal into transients, sinusoids and noise, and modeling the signal on these parameters. The MPEG4v2-HILN standard is based on this.

What's music to my ears is that there are also a few techniques and codecs that do not sacrifice quality. The Integer Modified Discrete Cosine Transform (IntMDCT) method targets lossless audio coding, which lets you reconstruct an identical copy of the original signal from the compressed file. Binaural Cue Coding (BCC) delivers parametric representation of spatial audio to give you multichannel output from a single audio channel. FhG uses BCC in its MP3Surround technology.

These and other techniques are used in several other codecs, such as the open-source Free Lossless Audio Codec (FLAC) and Ogg Vorbis. Both lossless compression codecs support multichannel audio. No wonder they are already supported by a few players, including Rio Audio's 20GB Karma player, Cowon's 30GB iAUDIO X5 and Samsung's YEPP YP-T7X.

As companies design and manufacture an increasing number of such models for high-quality music in Asia, even finicky consumers like me would buy in.

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