You only need an iPod for listening music.
But for hifi, we have to pay a lot for external dac,amp. Actually, they are developing much slower than you expect.
Depending on the headphone, amps can make a big difference in sound (e.g. planar magnetic headphones). Others are very sensitive and are only subtly improved by an amp (e.g. most Grados), and sometimes people enjoy the coloration added by some amps (e.g. different tube + amp combinations). Some iems are so sensitive that you can damage them with a powerful amp and should do without. Dacs generally make very subtle differences in sound, but with very high quality recordings and good headphones you can hear a difference. So skipping the amp and dac in some headphones can get you 98%-99% of the way to their full potential, which is the most rational option for the overwhelming majority of people. But audiophiles are obsessives and will pay several more times the price of the original headphone to reach 100% of their potential.
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