Bluetooth codecs compress audio data for wireless transmission. The codec determines how much data is preserved (bitrate), how long the transmission takes (latency), and ultimately the sound quality you hear. The most common codecs are SBC (universal baseline, 192–328 kbps), AAC (Apple default, 256 kbps), aptX (352–576 kbps), aptX Lossless (up to 1.2 Mbps), and LDAC (Sony's high-res codec at 330/660/990 kbps).
SBC quality varies significantly across devices because manufacturers can set different bitrate caps. AAC is well-optimized on iPhones but inconsistent on Android. LDAC at 990 kbps is audibly transparent in blind tests for most listeners. The biggest sound quality upgrade is simply getting off SBC — any upgrade to AAC, aptX, or LDAC is noticeable.
Latency matters for video and gaming. Standard SBC latency is 150–250ms (noticeable lip-sync delay). aptX Low Latency and aptX Adaptive reduce this to 30–40ms. For competitive gaming, a 2.4GHz wireless dongle (not Bluetooth) achieves sub-20ms latency.