MP4 offers greater compression (i.e. faster downloads), but it requires royalties. With early versions of JMF, Sun only officially supported MP-1 and read-only MP-2. In recent JMF (Java Media Framework) versions there is also MP-3 support. They withdrew MP-4 support. However, you can get a plug-in MP-4 decoder from IBM (International Business Machines). Apple iPods, and QuickTime play MP-4 both audio and video so it is becoming a popular format.
Creating MP3 or converting other formats to MP3 is extremely CPU (Central Processing Unit) intensive. It takes many times longer than just playing the MP3. To do it in real time usually requires special purpose hardware.
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