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-- mofosyne, Aug 18 2014 If you're not going to use SPDIF you may as well go wireless. Either way, you're just moving the DAC part of the chain from the soundcard to the headphones.-- Spacecoyote, Aug 18 2014 What [Spacecoyote] said-- piluso, Aug 18 2014 random, halfbakery