An AAC stands for Advanced Audio Coding. It is a newer kind of audio file that has been promoted as a successor to the MP3. It offers higher-quality sound than an MP3, but takes up about the same amount of space. It is a standard that was developed by a group of companies.
On the other hand, the MP3 is the most common kind of digital music file. MP3s usually have no usage restrictions and can be used on as many computers or iPods as you want. Short for MPEG Layer-3, a digital media standard developed by the Motion Picture Experts Group (MPEG).
(source: http://ipod.about.com/od/introductiontoitunes/a/aac_mp3_choice.htm)
What it comes down to is while MP3s are compatible with virtually any type of audio and cell phone device, the AAC offers a higher quality sound. Apple probably chose the AAC because it is of higher quality than the MP3. Quality seems to be the dominating factor that Mac engineers perceive to be why Macs are better than PCs. They are more likely to choose something that may not be as widely compatible or used, but demonstrates a higher quality of sound.
In addition to this, the trend of technology is that it is constantly catching up. Apple probably reasons that eventually, technology will emerge that will serve the format of the AAC. When that day comes, itunes users will be able to have their cake...and eat it too...in other words, highest quality and universal compatibility.
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