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This article is written to help people shopping for an acoustic guitar that can be amplified (electric acoustic) or have an acoustic and would like to add that capability. There are a lot of choices, each with pros and cons.
First of all there are basically three ways you can amplify an acoustic guitar: (1) you can amplify the sound with a microphone, (2) you can amplify the vibrations from some part of the body of the guitar usually with some type of piezo transducer, or (3) you can amplify the electric signal created by the strings affecting the magnetic field of a magnetic pickup, like an electric guitar uses.
Microphones - Probably the best and purest way to capture full and natural spectrum of sound from an acoustic guitar is using a high quality microphone placed six to twelve inches away from the sound hole. This is the method of choice for recording and can also be used in live situations where stage volumes can be controlled. The drawbacks are having to lug around the additional equipment, and the microphone also picks up all other sounds. So if there is a lot of other noise from the audience or other instruments, it will amplify that as well. Feedback can also be an issue.
You can also get systems where a microphone is permanently attached inside of the guitar. These work very well, but also pick up ambient noise as well as noise created from moving or handling the guitar. Feedback can be an issue with these as well.
Piezos - This is by far the most common way to amplify an acoustic guitar. They are relatively inexpensive, and work quite well. The vast majority of electric acoustic guitars sold, from budget models to high end, use piezos. Most of these systems utilize a thin piezo element placed under the saddle, hence the term under-saddle transducers (UST). One of the criticisms of USTs is that they often have a percussive sound, which some find to sound unnatural.
Another type of piezo uses thin discs mounted inside to the soundboard or the bridge plate. Well designed systems of this type from companies like K&K (http://www.kksound.com/) and JJB Electronics (http://jjb-electronics.com/index.html) sound very natural, with less of the percussive sound of an UST. Many guitarists consider this type of system the next best thing to using a good microphone.
Piezo systems are still prone to picking up noise from handling the guitar and feedback. Feedback can be reduced by covering the sound hole. Often piezo systems are used in conjunction with pre-amps which provide the player more control over the sound.
Magnetic pickups - These function the same as pickups used on electric guitars, but are voiced to capture the natural acoustic sounds. They are usually mounted in the sound hole. The advantage is that they are less prone to pick up ambient noise, and are less susceptible to feedback. The drawback is that they are not as good at picking up the natural resonance of an acoustic guitar, and sometimes sound more like an electric. Some people actually install an electric guitar pickup, however since the windings on acoustic guitar strings are usually non-ferrous (magnetic), often the volume from individual strings is not balanced. Magnetic pickups designed specifically for acoustics compensate for this.
Amplification - While you can use a regular electric guitar amp, they are usually voiced for electric guitars, and sound less natural with acoustics. Amps designed especially for acoustics or PA systems produce a far more natural sound.
All types of pickup systems can be either passive, meaning you plug directly from the pickup into the main amplifier, or active, meaning the signal goes through a pre-amp first. Pre-amps may be either on-board or a unit separate from the guitar. The pre-amp can be either very simple, only boosting the signal, to quite elaborate, including such features as equalization, phase balancing, modeling, effects, and tuners.
Most guitarists like to have some control either built in or within easy reach to control volume and make other adjustments. Most popular are active, on-board units mounted on the upper bout, giving the player easy access. Most of these have at a minimum volume and some type of tone controls. The disadvantage of this type of unit is it requires cutting a large hole in your guitar.... something you may not want to do with your treasured instrument.
Other options include units that are completely inside the guitar, with only a few small controls protruding on the outside, or units that mount inside and are and are accessible through the sound hole.
Some units have a separate plate with the output jack and often access to the battery located on the lower bout. Some jacks that are replace the rear strap button, and some have ordinary jacks located on the lower bout.
You can also have passive controls (meaning they are not part of a pre-amp) that allow simple adjustment of volume and tone.
If you are considering purchasing an electric acoustic guitar, go to a store where you can try out a variety of guitars with different systems. If you are a novice, and feel overwhelmed by the technology and choices, bring an experienced friend, or get advice from your teacher if you are taking lessons.
All of these types of pickup systems can be retrofitted to your current acoustic guitar. Prices range from $50 on up to.... well, probably more than you want to spend, plus installation cost. I have experience installing these various types and would be happy to visit with you and help you find what meets your needs best.