New chip provides high-end sound even with low-end speakers. Maybe this chip will be in home stereo gear soon. http://www.technologyreview.com/read_article.aspx?id=17858&ch=infotech
It could potentially do a really good job in the car market. DSP processing is very powerful and only limited by the imagination and talent of the programmer.
It sounds quite familiar. I believe that about ten years ago, a number of high end audio companies, particularly Meridian, were working on digital processing to match speakers to the acoustic characteristics of the individual room in which they were located. I don't know what happened to the research in the area as I haven't been following it. At the time, I think that it was just beyond the capabilities of the processing technology of the time. However, a lot has changed since then in the digital world. It sounds like the work is ongoing. It is certainly something to watch.
It's just dsp proccessing, quite common as Kal says above. As to it's effectiveness for us, if you read the second page of the article it says that it won't be of much use to audiophiles with high end systems.
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