MPEG-1 or MPEG-2 Audio Layer III,more commonly referred to as MP3 (or mp3), is an audio coding format for digital audio. It uses a form of lossy data compression to encode data using inexact approximations and partial data discarding to reduce file sizes, typically by a factor of 10, in comparison with a CD while retaining a sound quality comparable to uncompressed audio. Compared to CD quality digital audio, MP3 compression commonly achieves 75 to 95% reduction in size. MP3 files are thus 1/4 to 1/20 the size of the original digital audio stream. This is important for both transmission and storage concerns.