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The phrase "polyphonic ringtones" refers to ringtones that play several notes at once. Polyphonic ringtones sound more realistic than monophonic tones that play only a single note at a time. Newer phones can play up to 72 notes at once.
Polyphonic ringtones shouldn't be confused with MP3 ringtones or other formats that use actual audio clips from popular songs or movies. Phone ringtones that use .wav files or MP3s don't rely on the phone to create the tones like a musical instrument. Polyphonic ringtones work by making sounds with the phone's software, almost like a musical instrument. These ringtones sound like a popular song, but still have that artificial quality that sets them apart from "true sound" phone ringtones.