The Guardian reports that Apple is developing a new audio file format.
Apple is working on a new audio file format that will offer “adaptive streaming” to provide high- or low-quality files to users of its iCloud service.
The new format could mean that users can get “high-definition” audio by downloading to an iPhone, iPad or iPod Touch. Alternatively, it could offer a streaming service – like that of Lala.com, the music streaming and online storage company, which Apple acquired late in 2009.
No technical details are available yet as far as I can tell. This part is weird:
“All of a sudden, all your audio from iTunes is in HD rather than AAC. Users wouldn’t have to touch a thing – their library will improve in an instant,” said the source, who requested to remain anonymous.
This presumably refers to your music files on iCloud, not the ones you’ve downloaded. It seems a bit disturbing to me that Apple would just replace all the music you’ve paid for with a new format, but maybe I just don’t understand iCloud.

Making sense of MPEG audio formats
February 1, 2012 — Gary McGathLately I’ve been trying to clarify in my mind exactly how certain common MPEG-related audio formats are defined. I think I’ve got this right, but if anyone can offer corrections, they’d be appreciated.
MP3
This is the common name for MPEG-1 and MPEG-2, Audio Layer 3, which defines an encoding method. The difference between the MPEG-1 and MPEG-2 variants is just in the sampling rates. It’s audio-only. An “MP3 file” is normally a raw MP3 stream without a container.
MP4
MP4 means MPEG-4 Part 14. This is a container format which can hold audio, video, or both. It doesn’t specify the encoding method. In principle you could have an MP3 stream in an MP4 file. The preferred extension for MP4 containers is .mp4, but many others are used to denote specific encodings within MP4 containers.
AAC
This is short for MPEG-2 Part 7, Advanced Audio Coding. MPEG-4, Part 7 defines some extensions of it. That’s the encoding; several different containers may be called “AAC files” if they hold an AAC stream. A raw AAC stream file is possible but not common. MP4 is the most common container, so “MP4 audio” and “AAC” are often treated as if they were synonyms. HE-AAC, also known as aacPlus, is an MPEG-4 audio profile. HE-AAC decoders can decode AAC, but not vice versa.