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iPhone 7: Will it Sell without a Headphone Jack?

On September 7, 2016, Apple unveiled their new iPhone 7. It is IP67 (waterproof), and it has a faster processor, better battery life, a better camera, and a better screen then the last generation. The one thing it may not have improved on was the headphone jack: it does not have one. Apple decided to remove the headphone jack, and require people to use either lightning headphones, or a $29 (included, but easy to loose) adapter. While lightning headphones sound fine, they come at a cost: you have to use an adapter to use headphones with a 3.5 mm jack, which means that you have to bring that adapter with you everywhere. Furthermore, if you use lightning headphones, they will only work with the iPhone – not your laptop, your video game console, or any other device which outputs sound and uses the ubiquitous 3.5 mm headphone jack to do so. Of course, that could change if more manufactures switch to using the lightning connector for audio. Yet, on the same day as the new iPhone was released, Apple released a new MacBook – with a 3.5 mm headphone jack, and a single USB C port. No lightning port in sight. One interesting question the new iPhone raises is whether headphone and laptop manufactures (at least Apple) will also switch from the 3.5 mm jack to a lightning jack or if they lack the “courage” which Apple claims to posses.

To answer this question, consider a game as follows. There are two players: Apple and companies which make audio equipment. Apple has two options: use a 3.5 mm jack in all their products, or switch completely to lightning jacks (which they have not yet done, even in the new MacBook). The audio equipment companies also have two choices: they can either make lightning audio devices, or they can stick with 3.5 mm devices, which are more widely used, and rely on people using adapters to use their equipment with the new iPhone. Let the lightning option be represented with a the letter L and the 3.5 mm option be represented with the letter N (for normal). Then, this game can be represented with the following payoff matrix:

Audio Equipment Companies

Apple

L

N

L

(5,5)

(3,2)

N

(3,0)

(3,3)

For the payoffs, I chose the payoff for (L,L) to be (5,5) because if everyone switches to lightning, both companies will sell lots of new hardware. For (N,N), I made the payoff (3,3) because both companies would just do business as normal. For (N,L), I chose (3,0) because Apple would do OK, but I do not think anyone would buy lightning audio equipment if Apple did not support it. For (L,N), I made it (3,2) because people would probably like lightning headphones so they would not have to use an adapter.

This game has two Nash Equilibria: (L,L) and (N,N). This means that if Apple switches to lightning, it is the audio companies best response to also switch to lightning and vice versa. In the other case, if neither company switches, it is in each companies interest to not switch.

Overall, since Apple has switched, it is in the audio companies best interest to also switch, and so, sadly, it seems the headphone jack might become a thing of the past.

This blog post was inspired by this article: http://www.theverge.com/circuitbreaker/2016/6/21/11991302/iphone-no-headphone-jack-user-hostile-stupid

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