Major audio-equipment manufacturers are developing a new kind of device that plays both regular CDs and those encoded with MP3 files. MP3, the popular format for music distributed over the Internet, compresses data more than the format normally used on CDs. That permits more music - as many as 12 albums - to be stored on a single CD, though the sound quality is lower.

Electronics companies are also bringing out products that can tune into music transmitted over the Internet. The new products will include radios with built-in modems to tap into so-called streaming audio, such as faraway radio stations that broadcast their programs on the Web.

Such Internet-related products represent a huge sales opportunity for the audio industry, which is already having a stellar year and may be headed for one of its best Christmas selling seasons ever. Manufacturers hope to persuade consumers to replace their CD players more quickly than usual. In addition, they want to grab back the young consumers who have based their music-listening around personal computers, rather than traditional audio equipment.

The products are part of a growing reliance on digital technology to deliver a greater variety of audio programs and services. Next year, for instance, two companies plan to begin satellite delivery of audio programs to cars and trucks that have saucer-sized antennas. And radio broadcasters have started to talk about switching to digital signals, just as TV stations have begun to do.

Philips Electronics NV of the Netherlands and the RCA unit of Thomson Multimedia SA of France are both shipping portable CD players with MP3 playback capability to the U.S. Philips already offers them in Europe, while Thomson will begin selling them in Europe next year. RCA also will offer a bookshelf stereo with a five-CD changer that can read MP3 files. The portable players are priced around $ 150 in the U.S. - about twice the average price for a basic portable CD player - but Philips charges 599 euros ($ 524) in Europe.

These devices follow two other types that already take Internet audio outside the PC. The first -portable MP3 players that store music on flash memory chips or cards - emerged in late 1998. In recent weeks, a $ 700 portable MP3 player went on sale that stores music on a hard drive, which can hold far more music than either a CD or flash memory.

In general, the MP3 format records, stores and plays sound at a lower rate of bits of information per second than is normal for a CD. Most MP3 recordings are made in a range of 96 to 320 bits a second, while the typical CD recording is done at 1,400 bits a second.

Carter Parks, a high-school student in Cheyenne, Wyoming, gets about 12 to 13 CDs onto a single $ 2 blank CD by converting the music into the MP3 format. He now has three MP3-based CDs and usually plays them on the "random" setting on his laptop computer. "I can go for two or three weeks without changing my CD," he says.

He adds that MP3 files don't sound as good as an ordinary CD, but he doesn't mind because the small size of the speakers in his computer limits quality anyway. Andy Mintz, a senior vice president in Philips's North American operation, says: "People have grown up listening to pocket radios. They've grown up listening to cassette. Those aren't as good as CD. This is just another format."

(The Asian Wall Street Journal)