There are three principal ways to encode audio data: uncompressed, lossless compression and lossy compression. There are proprietary platform-dependent versions of each. Uncompressed audio is most commonly seen as either the .WAV format for Windows or .AIFF on the Mac. The quality will depend upon the sampling rate. The original sampling rate for CD audio was set at 44.1 KHz, designed to exceed double the highest audible frequency. Each sample was represented using 16bits. More recently, a limited amount of material has been made available in higher quality, sampled at up to 192 kHz and using 24 bits. Companies such as Linn and Naim offer direct download of their own recordings for direct replay using home computers or servers.
Lossless compression is designed to store music more efficiently whilst maintaining the integrity of the signal. These compression algorithms are designed to allow the signal to be reconstructed bit for bit compared to the original. They can achieve a compression rate of 2-3 storing a typical CD occupying 600Mb in uncompressed form in around 250-300Mb depending upon the complexity of the signal. Examples of lossless compression are WMA Lossless for Windows, Apple Lossless for the Mac (and iTunes even when running under Windows) and FLAC as an open-source alternative.
Lossy compression achieves higher compression rates by effectively removing the parts of the signal that are unlikely to be heard. The compression rates achieved vary according to the sampling rate chosen but are typically up to 10 times storing a CD in around 50-60Mb. Examples of this type of compression include MP3, the most common format of all, as well as WMA for Windows, and AAC (used in the M4p file format) used by Apple in the iTunes store.