DMG format has controversial advantages compared to the ISO format such as encryption, compression. While Mac users can use the ISO format on their systems, most software on OS X is distributed as a DMG file. The advantage of this format is a lot - it is an open standard format and the tools that work with it are available for all operating systems, Windows, Unix / Linux and OS X. ISO file format is widely used in the PC world as a format used for CD / DVD image.
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