I think we can all agree that pushing hdmi circuitry off the iPhone reduces cost of the device, increases cost of the dongle, and drops signal quality. We can a

I think we can all agree that pushing hdmi circuitry off the iPhone reduces cost of the device, increases cost of the dongle, and drops signal quality. We can also speculate that signal quality will increase over time by a combination of better encoding, pass through for already encoded signal, and raw speed upgrade for lightning protocol itself. What is puzzling is the timing of the release. There is an obvious drop in quality, and no obvious reason to save cost in iPhone 5. They could have let the technology mature to quality parity and only then release it, so what gives? My theory is that Apple came under serious price pressure, as cheap smartphones are now the fastest growing segment of the market, and so they are preparing to ship a very cheap version of the iPhone. Given their position as high-margin company on one hand and pressure from low-margin competition on another, they felt the need to pinch every penny. And so the iPhone 5 ended up being the test bed for the new wave technology with much lower cost of entry, but more expensive accessories. Unfortunately, what we get in the interim are both expensive devices and expensive peripherals.