While I've yet to do a full side-by-side comparison, thus far I believe audio quality is the worst aspect of the service. Case-in-point: Walk the Moon's "Shut Up and Dance" came up on Beats1 and sounded quite hollow on my highly-regarded V-MODA M-100 hi-fi headphones. So I launched the song on the Beats Music streaming service, which has been tested to be very close to CD quality despite being only 320kbps and it came alive. The soundstage was greatly expanded, the guitars had power, and it was generally a huge improvement. I still have a ways to go in comparison, with a lossless comparison forthcoming but no matter how great the service is if the audio quality isn't great it ruins the service for anyone listening with gear better than EarPods. Very disappointed but I have yet to test the songs directly separately from radio features. I should note all formal tests are accomplished on a Mac. Or perhaps, at this point until I compare non-radio streaming I should say the radio quality is lacking although the majority of radio stations do not offer top-grade audio. EDIT: While the Beats 1 station is still lacking in quality, it seems there was a bug or an issue with streaming that was causing songs to load at a lower bit-rate. Apple Music is now sounding and working great on the iPhone, although not as great as lossless. UPDATE: Apologies to Apple, the sound quality is more than adequate after additional testing. In fact, on many songs the quality is excellent. Their codec combined with the huge library of songs Mastered for iTunes means that there is a very minor difference between the original lossless song and the song on Apple Music. Best streaming service sound quality, not far behind Tidal. As mentioned the songs were loading at a much lower bit-rate originally (I believe the Radio loads songs at a lower bitrate). UPDATE 2: However, lossless is still noticeably better. Apple's compression is not perfect.