The phonograph recorded and reduced actual sound waves. Maybe not really well, but that’s what it did. On the other hand, a music box is basically a musical instrument, it sounds like a music box or other similar instruments. So I guess if you’re trying to reproduce any general sound, like a voice singing, the phonograph of course does a better job. In a head to head competition, with different kinds of sounds, the only time the music box would come out ahead is when playing sounds that are similar to a music box. Another difference unrelated to sound quality is that the music box needs to be essentially programmed to play a particular song, unlike the phonograph which uses a recording.
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