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.
Alternately, some MP3 players support so-called lossless compression formats, alternatives to MP3 files that use more disc space, but do not discard any of the original audio data. Apple has its own lossless format, which listeners can create by ripping their CDs using its iTunes software, and which can then played on the iPod. Windows Media offers a lossless format but it’s not widely supported in devices. An alternative open source Windows format called FLAC, in which some artists including Metallica and Gillian Welch have begun distributing music, is supported by some iRiver and Cowon MP3 players.

Many device makers are also studying ways to manipulate the audio signal itself, in order to mimic the sounds of larger stereos, surround-sound speakers, or even live performances.

A number of companies, including iRiver, Samsung, and SanDisk, use technology from SRS Labs, which draws on psychoacoustic principles–essentially the physics of the way the ear collects sound waves, and the brain perceives them–to modify the audio.

In some cases, these features add the perception of deeper bass than small headphones can actually produce, by introducing subtle mid-range harmonics that might be produced by those lower bass tones. An analogous signal-processing trick is used to create the perception of speakers set farther apart than ordinary earphones.

In its latest generations of players, Samsung has added its own proprietary version of this signal-processing technology, called the Digital Natural Sound Engine Portable, which simulates surround sound through stereo headphones. For its part, Apple has eschewed this type of tool in its iPods, sticking with more traditional graphic equalizer settings and a “Sound Check” feature that equalizes the playback volume of songs recorded at different levels.

However, even these minimal signal-tweaking tools remain controversial for some audiophiles, who are often suspicious of any tampering with the original recording.

“I leave that stuff off,” Blackwood said. “I’m still a bit of a purist when it comes to playback, only wanting to tweak the audio to compensate for my surroundings.”

All of these subtleties ultimately depend on the quality of the speakers producing the sound, however. Most of the earbuds distributed with MP3 players are passable at best, with little ability to replicate deep bass tones, and only average clarity in accurately reproducing subtle sounds such as cymbal brushes or acoustic instruments.

Sony’s introduction of noise-canceling technology into the device itself, with a microphone in the MP3 player that senses and counteracts ambient noise, raises the stakes considerably. Rival executives say they’re watching to see how consumers react to this development, but no one has yet promised to follow suit.

“It’s a way in which device vendors can differentiate themselves, and we expect to see similar strategies, if not identical ones, over time,” said IDC analyst Susan Kevorkian. “But frankly, an important issue to consider is consumers’ perception of good enough. For many, even if music sounds sub-par … the perception is that it just isn’t that bad.”