Apple is killing the headphone jack - here's how headphone companies are preparing for a total hardware revolution

Antonio Villas-Boas/Tech InsiderThe Philips Fidelio M2L headphones connected to an iPhone's Lightning port.Headphones are on the verge of a revolution.

Apple is reportedly ditching the 3.5mm headphone jack in the next iPhone. And Intel is reportedly helping further USB-C's status as an alternative digital audio connector - the implication being that it could one day serve as the 3.5mm jack's successor on future Android phones (and laptops). Some devices have started the process already.

All this time, headphones based on Lightning and USB-C connectors have slowly started to sprout.

The point: The way most people connect their headphones to their gadgets is likely to change, with Apple and other mobile companies leading the charge. This raises the question of how headphone companies - the groups most likely to be affected by a fundamental shift to headphones as a category - feel about being taken along for the ride.

Judging by on- and off-the-record conversations with several of these firms over the past month, the response appears to be one of cautious optimism.

Executives from each of the companies Tech Insider talked to expect the 3.5mm jack's days to be numbered, but none of them could be described as panicked. If anything, many are excited by a potentially increased demand for new headphones, particularly when it comes to Bluetooth headsets.

At the same time, they stop short of full-throated enthusiasm. Companies are still in the process of sorting out what new challenges the headphone jack's death would bring. Some expressed skepticism over the purported benefits of Lightning and USB-C. In general, there'll be lots of waiting and seeing in the coming months.

What headphones will look like when the jack disappears

If the rumors are to be believed, wired headphones are likely to split into two camps: Lightning-based ones for the iPhone, and USB-C-based ones for everything else.

There'll still be plenty of holdouts using the old 3.5mm jack, too - Android and Windows OEMs aren't obligated to switch to USB-C all at once, and things like the PlayStation 4 controller aren't suddenly going to disappear.

At least in the short term, this could make it so you need multiple connectors available to use your headphones with all your devices. Not convenient!

Outside of simply buying new headphones, you'll likely have two ways around this. The first is dongles. One end of the dongle would work with the 3.5mm, the other with whatever new device you're connecting to. It'll flail around. It's not clear if Apple and company would include one with your next phone, or if you'd have to buy it separately.Martin Hajek/martinhajek.comAn iPhone 7 Plus concept image by designer Martin Hajek.The other, as we've noted before, is detachable cables. Many prominent on- and over-ear headphones have wires that can be swapped out in the event of damages. It turns out that this was a futureproofing measure, too; if you own an iPhone and USB-C device, you could feasibly buy whatever cable you need, then switch when the situation calls for it.

Cable sales could become a boosted source of revenue for various headphone makers. V-Moda CEO Val Kolton says his company is working on a Lightning-compatible cable with its Bluetooth-based Crossfade Wireless. Master & Dynamic head Jonathan Levine says his company plans to launch a wireless on-ear headphone that's also "designed to be USB-C." A company like Audeze already makes a headphone that works with 3.5mm and a separately-sold Lightning cable, and CEO Sankar Thiagasamudram says it'll put out a USB-C model at some point in the future. There'll be others.

As an aside: All of this illustrates how the transition between actually making a Lightning or USB-C headphone and making a 3.5mm model won't be terribly complex. The drivers, enclosure, materials, and so on don't have to change much - just the bit at the end does.

Everyone's going in on Bluetooth

Antonio Villas-Boas/Tech InsiderThe Jaybird X2 Bluetooth earphones.The main result everyone expects here is an expedited shift to wireless.

Wireless headphones have only gained steam in recent years, and they'd be the only way to ensure your pair works across devices in this scenario.

"It's a big shift for us and for the consumer," Skullcandy's chief commercial officer Sam Paschel told us. "We truly believe it's going to trigger a repurchasing cycle around headphones, with a very fast and very large shift to Bluetooth."

Naturally, those who've already devoted much of their resources to Bluetooth are thrilled about this shift. "Let me be very clear: This is monumental for us," said Jaybird CMO Rene Oehlerking, whose company solely makes wireless exercise headphones.

Most of those who haven't gone all-in are preparing to lean harder in that direction, either through more wireless devices - Levine says Master & Dynamic are also readying truly wireless earbuds, for example - or more "hybrid" pairs that work with or without your cable of choice.

There are quality concerns

Most companies expect Bluetooth implementations to improve as it becomes closer to the norm, but anyone who's owned a pair of wireless headphones can tell you about issues with battery life and consistently pairing with devices.

Maybe the biggest problem for consumers, though, is how all of this could affect sound quality. While the digital connections of Lightning and USB-C headphones do open the door for enhanced performance, that boost is only likely to be heard in higher-end pairs.Steve Kovach/Tech InsiderSo, today, most people listen to headphones with their phone. Inside that phone are a digital-to-analog converter (or, DAC) and an amplifier (or, amp). Without getting too deep into the weeds here, those bits are what make your music legible and audible. Generally speaking, the better they are, the better things will sound.

With most of these new headphones, and with all Lightning ones, those components are offloaded from the phone to the headphone itself. And, the fact is, most people buy cheaper headphones.

That second bit may sound random, but it's not. Here's the thing: The DACs and amps in phones today aren't that bad. They're definitely not good, but they're not awful - in some cases, they've gotten better. Last year's LG V10, for instance, made this a focus. The issue, then, is whether or not the DACs and amps in cheaper digital headphones (and dongles) can match that.

It's not like slapping a Lightning connector on a headphone magically makes it sound better. Cheap devices are made of cheap components, and cheap DAC and amps are terrible. At least to start, it wouldn't be surprising to see a $100 Lightning headphone sound the same as a 3.5mm equivalent, if not worse.

"I think in the near term, you're going to see [a performance boost] in the more expensive headphones," said Skullcandy Director of Engineering and Innovation Jeff Hutchings. "Just because, especially in the case of Lightning, there's a pretty significant cost increase just to put the base audio interface in there.

"So I think it's really, at least in the near term, maybe 12-24 months, going to be relegated to fairly high-end stuff. Over time the cost of that technology is going to come down, just like it always does."Antonio Villas-Boas/Tech InsiderThe LG G5's USB-C port.If you can afford one of those premium pairs, you'll be more likely to hear the benefits. Also, there's a good chance you're annoyed at how your current high-end headphones are about to be less relevant.

Bluetooth, meanwhile, has long lacked in the audio department, relatively speaking. Wireless headphones have improved over time, but compared to a wired pair, there's a slight lack of clarity and fine detail. Everything hits just a bit softer. There's only so much that can be done without the cable.

3 things all this could mean

ShutterstockThere are a few things to take away from this.

1. The average price of a capital-g Good headphone is likely to increase. Beats' rise to prominence made people much more open to drop cash on their cans; now, the headphone world is collectively banking on that willingness to keep growing. The hike might not be huge, but getting those capable internals into a digital headphone costs money, and Bluetooth has always come at a price premium.

"The prices will go up, but our costs go up significantly," Kolton explained. "It's not just the cost of the headphone, it's the engineering. A lot of people don't look at the engineering resources that go into it, which is quite expensive."

2. USB-C provides a way around that. Part of what Intel's doing involves making USB-C transfer analog audio (through what's called sideband use pins), much like what 3.5mm headphones do today.

That, in turn, would give headphone makers a choice between ditching a phone's DAC and amp and going digital, or just doing things the old-fashioned way. Any headphone that does the latter would be cheaper to make, without sounding different.

The problem is that this sort of functionality isn't totally finished. Nevertheless, various companies are eager to see more Android manufacturers work with the standard.

"Just using a crystal ball, I think that USB-C in five years might be the new 3.5," Kolton said. "But that's just my guess. We'll see."

(Another aside: If it wasn't already clear, Lightning is what sticks out here. Simply going from 3.5mm to USB-C could feasibly keep a still-open headphone market. If Apple were to switch the iPhone's port the way it has with the MacBook, though, it'd risk alienating a chunk of the market on two separate occasions.)

Mainstream headphone makers fully realize that most people buying their stuff are not audio enthusiasts. They don't spend a ton on their gear, and they listen to low-quality recordings through compressed streaming services.

"The reality is that most consumers, they can't really hear the difference when you play a high bitrate source file through Bluetooth versus over a typical analog or digital audio interface," Hutchings said. "I don't want to say it's not noticeable, but I think it's subtle enough that most people are pretty happy with Bluetooth audio quality."

With the progress Bluetooth headphones have made, that's probably true. If you're somewhere between "audiophile" and "don't care," though, you'll likely be pushed in one direction or the other. If you head toward the former, plenty of headphone companies will be happy to upsell you on what you've got now.

So, what's in this for me again?

Tech Insider/Jeff DunnThe Bose QuietComfort 35 noise-cancelling headphones.The pervading question in all of this is: Why kill the headphone jack? Will it actually fix anything for users?

My colleague Kif Leswing wrote a good breakdown of the potential benefits last week - aside from potential performance gains at the high-end, it looks to come down to two things: active noise cancelling (ANC), and new "smart" functionality.

The former is an easier sell. Lots of people love Bose's QuietComfort series, but the wired versions of those cans typically require you to keep an external battery pack hanging around.

Here, you could feasibly give any headphone ANC functionality, since it could just draw power from the Lightning or USB-C port. Noise cancellation still isn't something most people need, and it still tends to degrade sound quality, but at least having the ability could be appreciated.

How exactly the latter would be implemented is the big mystery here, but past reports and patent filings all suggest it'd involve an increased use of motion tracking and biometric data.

Basically, your headphone would be more capable of reading the world around you as you encounter it. This could help your audio adapt to certain environments.

"You could have head tracking, or microphone input from the headphone, and get that input to the phone so that it can do processing," said Thiagasamudram. "You could use biometric information or head tracking information and do audio processing based on that. Those kind of things would be possible with a digital connection more easily, either wired or wireless."

Head tracking is also crucial to a smooth virtual reality experience, something Apple appears to be testing. Throwing more sensors into a headphone could help you get more accurate fitness tracking data as well.

Are the benefits of this 'smart' technology even worth it?

Rafi Letzter/Tech InsiderThe Plantronics BackBeat fit Bluetooth earphones.The questions then become: 1. Are people willing to pay the increased cost that technology would surely force, and 2. Do enough people even want stuff like this in the first place?

Though everyone's at least curious, many companies we talked to aren't fully sold on that second one.

"Yeah, these are things that we can do," Kolton said. "You can put a heart rate tracker, accelerometer, voice assistant, any sensor we want to in an headphone. You can also put them in a wristwatch, or a phone, or a shoe. I bought these smart shoes by Nike once that showed me how high I jumped. It was pretty cool! I used them twice.

"The big litmus test is: Is that in your junk drawer or your closet six months from now, and are you really going to use it? And the answer usually is: Yeah, it really wasn't that useful. So in my mind, just really focusing on the Bluetooth - and having the versatility, the best sound, the quality control, and the durability - are the most important parts."

Nevertheless, "hearables" is an awkward-sounding word we're all likely to hear more of in the coming months.

Okay, now why is Apple doing this?

Drew Angerer/Getty ImagesApple CEO Tim Cook.That's the consumer side of things. From a business standpoint, it's worth remembering that Apple - which did not respond to a request for comment - typically operates in closed ecosystems. Much of its software and hardware is explicitly designed with other Apple things.

In many ways, this is Apple applying that ethos to headphones. Lightning is an Apple-only thing. Anyone who wants to make a Lightning headphone has to go through Apple and pay it its piece. Because of that, and because Lightning headphones require those additional electronics to be built-in, the cost of Lightning headphones will be relatively high. That lends a hand to Apple's own offerings, Beats included. The simple fact that Apple owns Lightning would also seem to give Beats the first path to any enhanced functionality that may come down the road.

It also has to be said that removing the Lightning port makes it easier to waterproof the iPhone - and thus keep some people from returning their device - and help it hit future design goals.

The race is on

nowhereelse.frA rumored leak of the next iPhone.Headphone companies are acutely cognizant of all of these issues. All told, though, there's a general acceptance of what's happening, and some are at least eager for the increased competition any changes would bring.

"Shifts like this, and our ability to react to them and be nimble - they're the things that separate great brands from good brands, and some of the things that make the consumer electronics space really exciting to play in," Paschel said.

"I'm happy because it'll separate the men from the boys," Kolton said. "And I think that that's probably best for consumers as well, because a good headphone is not going to be as easy to make. I just think that that's better all around."

So the race is on. It's just not clear who exactly is going to win.

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