Apple gets reportedly $4 per connector [1] for each 3rd-party device that uses a Lightning connector -- and that's with their new, kinder/gentler licensing scheme.
The adapter that comes in the box is the proverbial drug dealer's "first one" that's always free.
Imagine getting a $4 royalty on every pair of iPhone-compatible headphones that's sold in the world. That's worth a lot of free adapters in the short run.
Just as a first-order estimate: Forbes says that annual worldwide sales of headphones are $300M. If the average price of headphones is around 20 bucks (taking into account there are a small number of very expensive headphones but also a lot of cheap ones, that's probably high), that's something in the neighborhood of 15M pairs sold per year. If half of those become Lightning-connector equipped, that's $30M/year in revenue (on costs of zero!) going to Apple.
The connector could make the phone substantially worse as a phone and it still might be worthwhile. There doesn't need to be a compelling technical reason.
iPhones sales are over 100 billion dollars a year [1]. If this change makes the iPhone substantially worse to the point of losing even 1% of the would-be buyers, Apple will lose over a billion dollars in revenue.
The risks are so staggering that I would think they must genuinely believe that the jack connector is so technically obsolete that it makes the iPhone worse than the iPhone will be without it. I just can't fathom Tim Cook (or anyone) betting 100 billions for $30M/year. Of course I can be completely wrong.
Yeah but by the same logic what if 1% of iPhone users buy a second pair of headphones, even third party ones.
Tim Cook's Apple is all about grabbing extra small amounts of cash from users. e.g MacBook being unable to use USB devices or HDMI displays without a $90 dongle
Apple isn't betting 100 billion. Some portion of users use headphones, I have no idea what percentage of users that is, but it isn't everyone. Apple would know this figure though.
The adapter in the box isn't free, it's "free". You're still shelling out hundreds of dollars for the box, and the adapter is merely part of the bill-of-materials.
1- You are assuming the wired headphone market has a strong growth future. That's could be reasonable but is by no means certain
2- do you seriously think a company with a $515B market cap is doing this solely for the financial reason of adding a $30M/yr revenue stream? If Apple TV was considered "a hobby" for years the wired headphone market is... I don't even know. A momentary flash of color?
Can't the reason be exactly what Apple said? Wired headphones using an analog connection kind of suck. wired headphones with a smart connection are a little better because power and noise cancellation or other "smarts" don't have to all be bolted on to the earphones, but honestly still kind of crappy because of wires.
Clearly Apple thinks that wireless audio is the future but today wireless kind of sucks as well (pairing, moving between devices). Apple thinks it can make that better. So if in their view that is the future why would they waste energy and time and space on a 2nd dedicated IO port for audio?
The adapter that comes in the box is the proverbial drug dealer's "first one" that's always free.
Imagine getting a $4 royalty on every pair of iPhone-compatible headphones that's sold in the world. That's worth a lot of free adapters in the short run.
Just as a first-order estimate: Forbes says that annual worldwide sales of headphones are $300M. If the average price of headphones is around 20 bucks (taking into account there are a small number of very expensive headphones but also a lot of cheap ones, that's probably high), that's something in the neighborhood of 15M pairs sold per year. If half of those become Lightning-connector equipped, that's $30M/year in revenue (on costs of zero!) going to Apple.
The connector could make the phone substantially worse as a phone and it still might be worthwhile. There doesn't need to be a compelling technical reason.
[1]: http://www.forbes.com/sites/theopriestley/2016/01/11/apple-d...