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Brad Blackwood, a Memphis recording engineer, is as serious about sound quality as they come.

These days he often has an iPod in his pocket, although you aren’t likely to find him with white Ipod earbuds draped around his neck. Like many audiophiles and sound professionals, he’s upgraded to a pair of high-end headphones. But the fact that he has an MP3 player at all is a sign that digital audio is maturing.

“Portable players of all types have sounded rather bad as far back as I can remember, but the iPod really surprised me,” Blackwood said in an email interview. “Now competing companies are being forced to make better sounding products just to keep up.”

Indeed, portable digital audio has never had a stellar reputation among listeners keen on quality. But as Blackwood notes, that’s starting to change. Audio quality still ranks relatively low among consumer concerns, but early hints of an audio-quality arms race among device makers are beginning to emerge.

Sony is the latest to raise the stakes. A new generation of its Walkman player, announced this month, comes loaded with noise-canceling technology, aimed at silencing the interference of subway noise, jet engines, and other ambient annoyances.

This goes considerably beyond what any rival has done, and other companies are naturally watching with interest to see how the market responds. But they too have slowly added features–hardware and software–aimed at improving digital audio sound quality.

Most of these earlier tactics have been aimed at one of several weak points in the audio playback process: the quality of the digital file itself, the way in which the file is processed by the device, or the quality of the speakers in the earphones.

Because digital audio is simply data, the amount of information stored for each song affects playback quality. MP3 files, AAC files (which are distributed by Apple’s iTunes store), and Microsoft’s Windows Media files (distributed by Napster and Microsoft itself, among others) are all “lossy” digital formats: when a song is compressed from its original form into one of these, some of the original audio information is irretrievably lost. The discarded information is thought to correspond to the sounds least likely to be noticed by the human ear.

But quality still matters and can sometimes be assessed by noting the file’s bit rate, which indicates how much of the original file has been maintained in bits per second.

In the early days of MP3, many files were ripped at low bit rates such as 128 kilobits per second. Today, many music fans use higher bit rates, making the files sound closer to CD quality. Bit rates can also lead to confusion, however, because the newer file formats such as AAC and Windows Media, sold through online stores such as iTunes and its rivals, can offer very high quality sound despite an apparently lower bit rate.

Regardless of the bit rate, some MP3 players try to restore a little of the audio information that’s lost when the compressed file is created.

Toshiba’s line of Gigabeat players is one of the primary examples of this, with a so-called “Harmonics” feature that uses a proprietary software algorithm to calculate which faint, very high harmonics–usually above 16 kilohertz–were likely to have been in the original recording, and restore them.

“With this function consumers can enjoy more natural sound, close to an original source,” said Toshiba spokeswoman Junko Furuta. Toshiba is also building Microsoft’s new Zune player, although the companies have not said whether this feature will be included.

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