Standard CDs have a diameter of 120 millimetres (4.7 in) and can hold up to about 80 minutes of uncompressed audio or about 700 MiB of data. The Mini CD has various diameters ranging from 60 to 80 millimetres (2.4 to 3.1 in); they are sometimes used for CD singles, storing up to 24 minutes of audio, or delivering device drivers.

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At the time of the technology's introduction in 1982, a CD could store much more data than a personal computer hard drive, which would typically hold 10 MB. By 2010, hard drives commonly offered as much storage space as a thousand CDs, while their prices had plummeted to commodity level. In 2004, worldwide sales of audio CDs, CD-ROMs and CD-Rs reached about 30 billion discs. By 2007, 200 billion CDs had been sold worldwide.

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From the early 2010s CDs were increasingly being replaced by other forms of digital storage and distribution, with the result that audio CD sales rates in the U.S. have dropped about 50% from their peak; however, they remain one of the primary distribution methods for the music industry. In 2014, revenues from digital music services matched those from physical format sales for the first time.

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American inventor James T. Russell has been credited with inventing the first system to record digital information on an optical transparent foil that is lit from behind by a high-power halogen lamp. Russell's patent application was first filed in 1966, and he was granted a patent in 1970. Following litigation, Sony and Philips licensed Russell's patents (then held by a Canadian company, Optical Recording Corp.) in the 1980s.

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The compact disc is an evolution of LaserDisc technology, where a focused laser beam is used that enables the high information density required for high-quality digital audio signals. Prototypes were developed by Philips and Sony independently in the late 1970s. Although originally dismissed by Philips Research management as a trivial pursuit,[10] the CD became the primary focus for Philips as the LaserDisc format struggled. In 1979, Sony and Philips set up a joint task force of engineers to design a new digital audio disc. After a year of experimentation and discussion, the Red Book CD-DA standard was published in 1980. After their commercial release in 1982, compact discs and their players were extremely popular. Despite costing up to $1,000, over 400,000 CD players were sold in the United States between 1983 and 1984. By 1988 CD sales in the United States surpassed those of vinyl LPs, and by 1992 CD sales surpassed those of prerecorded music cassette tapes. The success of the compact disc has been credited to the cooperation between Philips and Sony, who came together to agree upon and develop compatible hardware. The unified design of the compact disc allowed consumers to purchase any disc or player from any company, and allowed the CD to dominate the at-home music market unchallenged.