AAC (Advanced Audio Coding) is a lossy audio codec standardized by ISO/IEC as the successor to MP3. AAC achieves better audio quality than MP3 at equivalent bitrates — AAC at 128 kbps sounds roughly comparable to MP3 at 192 kbps. It's Apple's default audio format (iTunes, Apple Music, iPhone recordings), and is widely used by YouTube, streaming services, and broadcast applications.
AAC uses more sophisticated psychoacoustic modeling than MP3, with better handling of high frequencies and transient sounds. It also supports up to 48 audio channels (MP3 is limited to stereo), making it suitable for surround sound. AAC files are typically stored in .m4a containers (MPEG-4 Audio) on Apple devices or .aac for standalone files.
Compatibility is excellent: all Apple devices, Android (natively), Windows 10+, and all major streaming platforms support AAC. The main scenario where MP3 is preferred over AAC is maximum compatibility with very old hardware (pre-2000 MP3 players, legacy car stereos). For new projects, AAC at 128-256 kbps is recommended over MP3 at the same bitrate.