As per apple
Custom alert sounds are played by the iOS system-sound facility, so
they must be in one of the following audio data formats:
Linear PCM, MA4 (IMA/ADPCM), µLaw, aLaw
You can package the audio data in an aiff, wav, or caf file. Then, in
Xcode, add the sound file to your project as a nonlocalized resource
of the app bundle or to the Library/Sounds folder of your data
container.
They does not mention MP3s
.
You can use the afconvert tool to convert sounds. For example, to convert the 16-bit linear PCM system sound Submarine.aiff to IMA4 audio in a CAF file, use the following command in the Terminal app:
afconvert /System/Library/Sounds/Submarine.aiff ~/Desktop/sub.caf -d ima4 -f caff -v