There is a misconception that iPhone only supports AAC format and that in order to play audio, it must be purchased from iTunes Store. The reason for the confusion is that music downloaded from iTunes is in AAC format. However, you can save music to iTunes from other sources and most of those audio formats are supported on iPhone.
Audio file formats – MP3, AAC, WAV, FLAC
Knowing which audio formats your iPhone supports is important if you want to use your phone as a portable media player. Chances are your music collection is a mix of audio formats, whether you’re getting your songs from ripped CD tracks, digitized cassette tapes, and torrent sites.
These are the audio formats that the iPhone can use:
Lossy compression removes information from pauses and empty spaces in an audio recording. This results in lossy files being much smaller than lossless or uncompressed files.