Because the part that matters in a DAC, is the chip itself, not the heavy, fancy looking metal case with a table sized circuit board with lots of useless and unnecessary additional components that don't improve the sound. :P I'm not saying Galaxy S + Bellari Ha540 is better than M1DAC + Bellari Ha540, I'm saying is absolutely identical, down to the slightest nuance possible to hear by undamaged young ears. :P On paper DAC in M1 is superior, but those advantaged its got, are beyond the point of diminishing return, and in order to be experienced, I'd probably need a seriously high end headphone + amp setup.
Its similar to how a small amp that is basically a wire with gain like O2 can sound as good as a much more expensive and bigger amp, as it was confirmed by many blind tests, there's a thread here on this forum about it.
This seems to completely ignore the fact that many things outside of the DAC influence the quality of the output in a phone - for instance the LG 2x using the same Wolfson as the S1 produces markedly inferior sound (measured objectively by Supercurio). This is partly because of the internal hardware set up of the phone in relation to things like shielding/CPU noise and all the other radios in the phone, and partly because of software layers the manufacturer may have set between the DAC and the headphone output (again objectively proven by Supercurio using an S1 pre- and post- Voodoo).
To my ear and with my equipment the S3 sounds noticeably better via an E7, YMMV. For one thing there are no crackles in the output with the S3s screen off when listening via the E7 because all the audio is handled by the E7, rather than in the S3 where some kind of power-saving setting is causing the crackles (again, a problem in sound quality that has nothing whatsoever to do with the merits of the DAC in the S3).
Once we get Voodoo Sound I expect the difference will be too small to want to bother with using an external DAC, but up until that point in time I'll be using my E7.
Edited by NZtechfreak - 6/30/12 at 5:58pm