So my first question is : Would an amp be the first improvement to the sq
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How much money are you considering to put into your investment?
Honestly the iphone 5 is fine as a source for fairly budget oriented headphones or in ears. Yes there will be benefits if you use an amp, but honestly, budget headphones dont scale well off amps and werent really created with amping in mind. Theyre meant for just plug in and play.
If you plan on keeping your mdr 700, then yes probably get yourself an amp. If you're thinking of starting new, finding a new headphone and a new combo all together, then depending on the amount you want to pay, just straight out buying a new headphone is probably the best option.
So the question now is how much are you willing to spend and do you want to keep the headphone.
I know more and more (if not many) DACs are able to receive signal from iphone 5's lightning now. As long as the DAC has its own power source or doesnt take too much power from the iphone itself, and as long as you have the right connections, i think it can be done with more and more DACs now.