Steve Jobs was working on next iPod with Neil Young

Neil Young performs at "Farm Aid 25: Growing Hope for America" at Miller Park, Oct. 2, 2010, in Milwaukee, Wis.
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Musician Neil Young said he was working with the late Steve Jobs on the next iPod.

According to Young, Jobs wanted to create a format that had 20 times the fidelity of current electronic music files. Young claims, Apple's AAC format only holds 5 percent of the full recorded data, while compact discs hold about 15 percent.

"Steve Jobs was a pioneer of digital music. His legacy is tremendous," Young said. "But when he went home, he listened to vinyl," Young said at the "D: Dive Into Media" conference Tuesday.

Jobs and Young agreed there was a lack of high-quality music formats. They wanted to work on new hardware that was capable of storing files with 100 percent of the data recorded in a studio. The only problem is a music file of that caliber would take 30 minutes to download one song.

Young doesn't have plans to carry on without Jobs, as of yet. Jobs died from cancer at the age of 56 last October.

"I talked to Steve about it. We were working on it," Young said. "You've got to believe if he lived long enough he would eventually try to do what I'm trying to do."

The "D: Dive Into Media" conference is held by AllThingsD. Co-executive editor Walt Mossberg interviewed Young and confirmed Jobs' sentiment over digital music.