I keep replying to so many ignorant comments it's unbelievable.
It's clear 95% of iPhone users have absolutely no idea as to how this technology will affect us negatively.
The same group of people have no idea as to how audio works and how we hear audio.
I know that Steve Jobs was a huge proponent of high quality audio. It's why he brought out the original iPod and it's why he included a lossless compressed format. Additionally, the original iPod was famed for it's incredibly high quality DAC and even today, many audiophiles continue to use their iPods to store large quantities of lossless music.
I somehow feel the Apple today doesn't care much about that and I assure you this would never have happened under the guidance of Jobs.
iPhone's nowadays have very good but not excellent DAC's. It means you get a very satisfactory audio output which is very acceptable to 99.9% of the population.
Moving to a lightning digital audio output will not increase the audio quality as the DAC will be entirely dependent on the headphones you use and guess where manufacturers will save. And as some have suggested, Apple will charge $20-30 for a lightning to 3.5mm converter and this will have to contain a DAC, but it'll be cheap and pretty nasty for that price.
Here are some examples of good quality portable DAC's:
http://www.whathifi.com/best-buys/best-dacs
You begin to get an idea as to how this will impact users from a quality perspective.
THANK YOU. The iPod was the gateway for me into the iPhone. It's sad enough that I just don't like the design of the Music app anymore.
The great thing about the current iPhone is that, with decent headphones, it does a good enough job with sound quality that outperforms 95% of other smartphones.
I also own a Fiio high resolution audio player and it smokes the iPhone BUT it is a second device and too cumbersome for podcast management. It is great, that even though I've heard the difference, that at least I can use the iPhone and not hate the sound.
The real innovation would be to simply put a better DAC into the damn phone. I've already got an external solution. Tons of external solutions already exist. Bluetooth already exists.
If they were to move to external DACs and pretend that the 3.5mm jack were a bottleneck to convince the masses that a lightning connector is the only way to hear better audio... It would only prove to me that they were unwilling to design a better phone.
Proprietary cables are one argument, but moving the DAC out of the phone would be no different then having the camera plug into the Lightning jack. Don't applaud moving a feature to outside the phone.