Here's a quote from an "anonymous Apple engineer" regarding the Lightning Digital AV Adapter. He's responding to an article from the guys at Panic who found that in some cases the adapter was only outputting a 900p image.
I'm just dropping it in to shed a little more light on the Lightning AV system and, if true, the potential for future improvements to the quality it outputs.
Oh, and just in case anyone wasn't aware, the Lightning Adapter has both a processor and memory. Essentially a very low powered iOS device. That's why he mentions offloading work to the adapter.
The reason why this adapter exists is because Lightning is simply not capable of streaming a “raw” HDMI signal across the cable. Lightning is a serial bus. There is no clever wire multiplexing involved. Contrary to the opinions presented in this thread, we didn’t do this to screw the customer. We did this to specifically shift the complexity of the “adapter” bit into the adapter itself, leaving the host hardware free of any concerns in regards to what was hanging off the other end of the Lightning cable. If you wanted to produce a Lightning adapter that offered something like a GPIB port (don’t laugh, I know some guys doing exactly this) on the other end, then the only support you need to implement on the iDevice is in software- not hardware. The GPIB adapter contains all the relevant Lightning -> GPIB circuitry.
It’s vastly the same thing with the HDMI adapter. Lightning doesn’t have anything to do with HDMI at all. Again, it’s just a high speed serial interface. Airplay uses a bunch of hardware h264 encoding technology that we’ve already got access to, so what happens here is that we use the same hardware to encode an output stream on the fly and fire it down the Lightning cable straight into the ARM SoC the guys at Panic discovered. Airplay itself (the network protocol) is NOT involved in this process. The encoded data is transferred as packetized data across the Lightning bus, where it is decoded by the ARM SoC and pushed out over HDMI.
This system essentially allows us to output to any device on the planet, irregardless of the endpoint bus (HDMI, DisplayPort, and any future inventions) by simply producing the relevant adapter that plugs into the Lightning port. Since the iOS device doesn’t care about the hardware hanging off the other end, you don’t need a new iPad or iPhone when a new A/V connector hits the market.
Certain people are aware that the quality could be better and others are working on it. For the time being, the quality was deemed to be suitably acceptable. Given the dynamic nature of the system (and the fact that the firmware is stored in RAM rather then ROM), updates **will** be made available as a part of future iOS updates. When this will happen I can’t say for anonymous reasons, but these concerns haven’t gone unnoticed.