Apple seems to plan removing the headset jack from the next iPhone 7, according to a reliable source. Screen shape such as radius will be kept, however, it will very likely be more than 1 mm thinner than the current model.
The company is likely looking to make its iPhone even thinner but the standard 3.5mm headphone jack limits the device from getting any smaller. The problem can be circumvented by getting rid of the port and equipping its EarPods with a Lightning connector instead of a regular headphone connector.
Supplied Ear Pods will equip a Lightning connector, which means a DA (Digital to Analog) converter is required. The DA will be built in the Lightning connector without sacrificing the size, according to the source.
Apple may rely on third party manufacturers to produce a headset to Lightning converter or sell a separate Lightning cable with a DA converter to solve compatibility issues.
For those already using Bluetooth headphones, there would obviously be no issues.
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