Sony's ZX1 Walkman supports AAC (a lossy file format), FLAC, MP3, WMA.
David Chesky, who co-founded high-definition music download site HDtracks.com six years ago, said a few hundred thousand people visit the site each month to purchase files.
"And we're scaling out: Millions of people in the world are audiophiles," he said in an earlier interview with Computerworld.
HDtracks sells audio files in formats that include 96,000/24 bits (which refers to a 96,000-sample-per-second file and a 24-bit rate) and a premium 192,000/24 format. HDtracks allows users to choose between downloading music in AIFF, FLAC, ALAC and WAV formats.
"It's not rocket science to see how much more information is in that file," Chesky said. "We're like a 1080p high-definition television set next to a 15-inch black and white. We're for people who listen to music attentively. If you want to listen to music while you're vacuuming, we're not the service for you."
Not everyone agrees with Chesky.
Some experts believe the human ear cannot discern the difference between a compressed audio file and a lossless format file.
Paul O'Donovan, a principal research analyst at Gartner, said there may be some people who in a quiet sitting room with very high quality audio equipment might be able to hear a difference between formats, but even with high-quality headphones, out and about walking around the streets or public places "those subtleties will generally be lost."
"After all, this is the purpose of a mobile device, that you can take it anywhere, so I'm not really sure what the advantage would be to the ordinary man in the street," O'Donovan said. "Is it worth $700? Probably not to most people, but then I don't think this is the aim of Sony."
Paul Gray, director of electronics research for DisplaySearch, agreed that Sony's ZX1 is a niche product targeted at audiophiles.
Gray believes the average consumer can hear the difference between a CD and an .MP3 recording, and increasing the bit rate on that .MP3 file is also detectable.
But when it comes to increasing the sampling rate of an audio file, that is a different animal.
"Higher rate sampling over CD is contentious as it contradicts all mathematical sampling theory. I have never come across double blind test results confirming it is audible," Gray said.
While some distortions, also known as "artifacts," can be introduced when music is compressed into a new file format, hearing those noises would require "a very clean listening environment, not so easy for a mobile product," Gray said.
"Most consumers would prefer to spend $700 on a new phone," Gray added.
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