This is a headphone with an embedded sound modem
interface.
What happens is that when plugged in a dumb audio
device, it will function like any normal headphone.
However when plugged into a 'smart device', it would
switch to full digital mode.
There is ground, left and right sound wires.
The left is
used to supply power, and the right hand side is for
data.
This would allow for a digital headphone that will not
need
batteries, but can provide clean digital audio as
required.
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Pros: Superior audio. Analogue fall back for majority of
device.
Cons: Apple will just end up swapping the wires and
breaking the standards for the iPhone666