You can plug a USB2 DAC into your phone?

A ton of people who own good headphones for their computer use a USB sound device instead of the motherboard's built-in audio. But today, similarly good headphones for mobile phones do not exist because phones can't drive them. This may not be a priority for a lot of people yet, but Apple is in a position to hugely increase the size of the market.

I'm not thrilled that it would create headphone lock-in on iOS vs Android, but you have to at least admit that it opens up opportunities for better headphones for phones than what's out there now.

If you'd tried to do this 10 years ago it would have been pointless because people's music libraries were all a bunch of MP3s ripped at 128 kbps. Now that Apple Music exists, Apple has direct control over the quality of the music they're streaming. If they want to make better headphones workable they can push out media in a format that makes them actually worth using.

Using an adapter to 3.5mm headphones doesn't feel like that big a deal to me. I would guess that Apple can output an analog signal over the lightning connector to allow a small passive cable (like DVI-I to VGA).

Going the other direction, someone (guessing Apple won't) could build a 3.5mm device that converts to a Lightning signal, but I'd expect it to also have to plug into a phone's accessory port to get enough power.