AM and FM are two very popular and very different methods of sending information over radio waves. AM is amplitude modulation while FM is frequency modulation. But what is modulation? It is the act of modifying a certain aspect of the carrier frequency according to the information that is sent. So it is clear that AM modifies the amplitude of the carrier frequency while FM modifies its frequency.
AM is the older and easier of the two technologies to implement. The receiver detects changes in the amplitude of the carrier frequency and amplifies it to drive a loudspeaker. The simplicity of the technology made it easy to build radio receivers in large numbers. The main problem associated with AM transmission is the fact that it is very susceptible to various weather conditions that deteriorate and distort the signal. The simplicity of the design also limits transmission to a single audio channel, making it unsuitable for stereo sound.
FM is a development over AM broadcasting and provides many substantial benefits making it much more complex compared to AM. The first and most important benefit is its ability to send two channels of information at the same time with the use of advanced algorithms. This allows the station to transmit both left and right audio channels for full stereo sound. Since most environmental factors that distort radio waves only affect their amplitude and not the frequency at which FM stores the actual voice signal, the data in the FM signal does not degrade as easily as AM. This also means that the quality of the FM signal does not degrade linearly as you move away from the transmitting station.
As for range, AM takes the cake with its much greater distance traveled. FM signals typically drop within about 50 miles of the station, but AM waves can be refracted in the atmosphere, resulting in a longer range. Range is also one of the reasons why talk radio prefers AM even if the sound quality is not very high.
The advancement in technology has also meant that the degree of complexity and price between AM and FM receivers has become somewhat debatable. Most manufacturers can even put all the circuitry for AM and FM inside a single chip, making them a package rather than competing with each other.
1. AM broadcasting is simpler than FM, but the difference in complexity and price is very marginal at present.
2. AM is more prone to distortion and signal degradation compared to FM.
3. FM does not degrade linearly with distance.
4. AM generally transmits in mono which is good enough for radio talk.
5. FM can transmit in stereo so is ideal for music.
6. AM has a longer range than FM.