Answer by Tarlius

Only if you tell it to. There are various audio format import methods, each suited to different needs. If you don't select a lossy compression it won't be mp3. Using mp3 is recommended for bgm/etc because it will be played by the iPhone's built in hardware codec, but only one sound may be played in this way at once (including via iTunes). You can also select quality/etc. See the [documentation][1] for details. Also note that its technically the import settings, not the build settings. Where they are will make no difference. [1]: http://docs.unity3d.com/Documentation/Components/class-AudioClip.html