In response to a question, I wrote:
I think the CD still has some value, though downloading has diminished the technology's future prospects. There are still a large fraction of consumers who purchase CD's , and they do so for several reasons. First, there are many music systems that accommodate CDs (home stereos, car stereos, etc.), so they remain more versatile until these are retired by consumers. A factor in this is the lack of a standard digital interface for MP3 players. Not everyone owns iPods! Second, CDs can be (legally) shared and resold. it is legal to create MP3 (or other compressed audio formats), so a CD gives owners the option of using multiple formats. Finally, CDs tend to be a more durable format. That is, it is not vulnerable to disk crashes or xray erasures the way hard disks or flash memory are.
We have also seen bridge technologies. Prior to CDs, cassette-based audiotapes dominated the music industry. Many cars had cassette players, so when CDs came to dominate, it was possible to purchase an (analog) cassette interface that connected to a portable CD player. In this transition, it is possible to purchase low power FM transmitters that use an "empty" slot in the FM band. The downside of this approach is that this "empty" slot varies by location, so it requires a bit of adjustment on the part of the user to match the tuner to the player. It is definitely not as good as the prior transition technology, in my opinion.
How much is the transition to MP3 players from CDs hampered by the lack of a standard digital interface? The de facto standard is Apple's iPod interface, though I don't know if other digital media players support that standard. Some audio devices now have an analog interface, which can be connected to the analog (headphone) output of the digital media player. Is that adequate?