(Victoria Will, Invision/Associated Press file)

A little-known, 18-employee, music-equipment manufacturer in Boulder is the technology driver behind Neil Young's digital-music venture, an end-to-end ecosystem that will pit the legendary singer-songwriter against Apple's iTunes and iPod juggernaut.

Young lifted the curtain this week on PonoMusic : an ultra-high-resolution music service that includes a corresponding high-end portable music player.

He said the idea for the business was borne out of his frustration with the low-quality recordings consumers have grown accustomed to, first with compact discs and then with MP3s.

The PonoPlayer.
The PonoPlayer. (Ph oto courtesy of Ayre Acoustics)

"What we decided to do was come out with a new system that's not a format, had no rules, respected the art, respected what the artist was trying to do," Young said Tuesday during a keynote speech at the South by Southwest Music Festival in Austin, Texas. "Pono plays back whatever the artist decided to do, or the artist's producer decided to do."

Young said it took him 2½ years to get the business off the ground. Just over a month ago, he tapped Boulder's Ayre Acoustics to develop the technology behind the digital-music player, called PonoPlayer.

Ayre, founded two decades ago, makes high-end music equipment, including a $3,000 digital-to-analog device that converts a song's digital signal to an analog wave before it's sent to a music player's speakers.

"That's one of the most critical points where you can either capture the music as it was originally made, or you can kind of destroy the soul of the music and make it lifeless," said Brent Hefley, Ayre's marketing manager. "(Young) listened to that and said, 'That's the sound that I want in this portable player.' That's the point where they called us up and asked us if we would meet with them in regards to designing the circuitry for the PonoPlayer."

Above is the digital-to-analog converter on which some key components in the PonoPlayer is based.
Above is the digital-to-analog converter on which some key components in the PonoPlayer is based. (Courtesy of Ayre Acoustics)

Hefley said record producers such as Rick Rubin, who was featured in a video Young played Tuesday about PonoMusic, use Ayre's equipment.

The digital-to-analog converter, or DAC, chip that Ayre created for the PonoPlayer is about 1/20th the size of the one featured in its standard unit. While the DAC chip is key to maintaining the integrity of a music signal, Ayre also incorporated technology from its $30,000 pre-amplifier into the player.

"We spent three straight weeks just hard-core working on this because they had a deadline to get this done," Hefley said. "This PonoPlayer is by far the best sounding portable player that will ever touch the market."

Ayre cut a royalty deal with PonoMusic for its work on the player, he said.

PonoMusic launched a Kickstarter crowdfunding campaign for the device to coincide with Young's keynote, and by Tuesday night it had surpassed its $800,000 goal. Geared toward audiophiles, the triangle-shaped player — about 5-inches long — is available for a Kickstarter pledge of $300 and will retail for $400. The PonoPlayer features 64 gigabytes of on-board storage and a 64 GB microSD card — enough memory for about 800 songs in the ultra-high-resolution format.

"We are absolutely delighted to have some of the audio genius of Ayre in our player — those guys are rock stars," PonoMusic CEO John Hamm said in an e-mail.

PonoMusic will feature an online store similar to Apple's iTunes that sells high-resolution songs in so-called FLAC format for between $15 to $25 per album. Depending on the level at which it is recorded, a PonoMusic file will have six to 30 times more musical information than a standard MP3 file.

"The user will notice it," said Mike McGuire, a vice president with industry research firm Gartner. "The question is: Will they notice enough to opt for it?"

Some locals in the digital-music industry aren't sold.

"No one has dedicated music players anymore. They have phones that play music," said Josh Nielsen, founder of Robot Audio, a browser-based digital-audio workstation for musicians. "This is a product that sound engineers and Neil Young worshipers will buy, but it will be a mainstream flop."

Young said the major record labels are on board, and countless rock stars voiced support in his SXSW video, from Tom Petty to Pearl Jam.

The PonoPlayer is scheduled to ship in October.

Andy Vuong : 303-954-1209, avuong@denverpost.com or twitter.com/andyvuong