Philips PSC60417 Release Note page 2

Similarly, in the past the standalone sound card market was
relegated to serving the needs of vertical segments like
audiophiles and gamers (who were willing to pay quite a bit
for additional sound capability). Today's market is driven by
mainstream consumers.
The Importance of MP3.
It should be noted that the PC entertainment trend has been
greatly accelerated by the MP3 file format. In fact, MP3 files
have revolutionized consumer music. Recent research*
indicates that one-fifth of Americans, or about 40 million
people, have downloaded digital music from file-sharing
services.
The obvious benefit of MP3 files is that they are compressed
to make Internet transmission easier. Using advanced
compression algorithms, the file shrinkage is significant, usually
at least by a factor of 10. With MP3, Internet transmission
times for a standard song track on a CD were reduced from
hours to minutes.
However, since considerable data is removed in the copying
process, the MP3 format is usually described as "near CD
quality." Conventional wisdom says that the data loss does not
affect the listening experience of the average user (i.e., sounds
that the human ear can't hear, louder noises are emphasized).
This, however, was a generous viewpoint established in light of
the significant offsetting benefits of reduced file size and the
accepted usage models of PCs a couple of years ago. The fact
is, the sound quality of MP3 files is substandard when
compared to CDs and home entertainment systems in
general. New standards are emerging for PCs based on the
consumer electronics usage model.
New Requirements.
The emergence of a mainstream market for CD-quality PC
sound should be good news for sound card manufacturers. But
most sound card manufacturers remain focused on optimizing
the processing capability of their cards; and, given the state of
sound card technology in 2002 (16-bit/48KHz data streams
remain the common standard), it's clear they are struggling to
make noticeable improvements – even to their traditional
audience of audiophiles and gamers. Focusing on changing bit
depths and sampling rates has met the laws of diminishing
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