But you don’t have to use their W1. Seriously. Unless you’re all in on the Apple ecosystem, there are headphones that have better sound, better battery, and cost less.
As for audio quality when it comes to codecs? Why not use FLAC or ALAC? Most people stream music these days, though, so they’re not going to benefit from those HQ codecs for the most part.
I don’t think any of the services have better than 24bit/96khz audio. And I doubt they’re going to be higher than 320kbps because of bandwidth on their end. Not many people would pay extra for higher quality streaming.