09:23 Sep 9, 2011 

Right - it is when the membrane cone does not travel as a rigid piston - but folds.

09:20 Sep 9, 2011 

It's the limit of undistorted sound reproduction.
I often hear, “My speaker breaks up too early so I need a higher power speaker,” or, “I want earlier break-up so I need a lower power speaker.” In most cases, both may be true. However, the power rating is not a contributor. I cannot emphasize this enough: the power rating does not contribute to the break-up mode of the speaker. The rate of break-up depends on the cone density and the relationship between the top plate thickness and voice coil winding height. Compare the latter with a parameter called Xmax, which represents the maximum linear excursion.

09:19 Sep 9, 2011 

The regular speaker membrane (conical usually) is made of cardboard (hard paper, carton). Because it has a low rigidity, at high power (volume), it tends to fold/breakup, and the speaker goes "kaput". By using magnesium/aluminum constructions (for the membrane), materials that are much more strong and rigid than paper, the speaker can accommodate/emit more power (higher volume levels) without membrane breakup. To use a real life parallel, the breakup is like the crushing of a paper or plastic cup when one applies pressure against the bottom whe the cup is on the table upside down.