The exact chip is an Apple/Cirrus part number 338S00105 they sell for $2-7 per chip. Wholesale might be cheaper, with Apple having a partnership with Cirrus, but the cost savings benefit on Apple's part is nothing to sneeze out. With the chip occupying 5mm of board space, I'm still not buying the "we're giving you guys more features" justification. This is very typical of Apple. Ditch the stylus. Ditch flash. Ditch optical drives. Sometimes they are correct in their prediction of redundancy, but their enthusiasm to forgo features, parts, and 3rd party obligations always benefits them not the consumer. Consumers only swallow it because I assume they feel like they are on the vanguard, at the cutting edge trend line of technology, that Bauhaus image of an Apple user sitting in front of his antiseptically clean, empty desk, with nary an interesting thing to plug in and play with in sight. Apple loves to sell that image, because it's such a simple one. And for some reason people eat it up. I'm a regular consumer too, and won't be buying a utilitarian device like a smartphone that doesn't have the utility of plugging in 99.9% of headphones that exist, including 100% of my own.