Doesn't fit nicely in pocket = not portable. That thing is several times the depth of the pictured phone, which itself looks to be in a slim rubber case.
As I'm not an electrician, how viable is a short mini-USB to SPDIF cable? I've mentioned it a few times now and from a layman's perspective I don't see why this can't be done. Then damn the software compatibility, you have a legit optical out solution from an MHL capable port. E17 would read that just fine.
Might not be as portable as a FIIO E7 but look at the spec and it's more in the class on the new Sony PHA-1, Fostex HP-P1 or CLAS with an Amp. This thing can easily replace any desktop rig and be happy ever after.