That's pretty shortsighted. The market's best music phones (Galaxy S devices with Wolfson WM8994, iPhone 3GS, iPhone 4) offer really solid audio output. I've got a Cowon D2 that I was "forced" to use back in the dark days -- you know, the days when chunky gray HTC bricks without 3.5mm headphone jacks ruled the land -- and I just can't hear the difference between it and any good music phone. I switched from an iPhone 3GS to a Google Nexus One (built by HTC) about a year ago, and the quality disparity was really noticeable. I ended up getting a Galaxy S which was initially disappointing because of the poor drivers, but after I loaded a ROM that used a Voodoo kernel and got Voodoo Sound going I was blown away. The Voodoo Sound developer (supercurio on Twitter) absolutely did Samsung's job for them and completely fixed the driver implementation for the Galaxy S's Wolfson DAC. I'd say it sounds at least as good as my 3GS did, but sadly I don't have it onhand anymore to conduct an ABX test with.
Over the last few years, I've owned a handful of smartphones that sounded horrible with my Shure SE530's (HTC Touch Pro, HTC Vogue, Nokia N82, Google/HTC Nexus One, HTC myTouch 4G) and a handful that sound great with them (iPhone 3GS, Samsung Galaxy S (Vibrant), another Samsung Galaxy S (Droid Charge)). Incidentally, the ones that sounded great were the ones with respectable DAC hardware inside.
The problem here and the stereotype that drives misinformed posts like the two above mine is that selling "a good audio chip" to the mass market is a tough thing to do. Look at HTC's new partnership with Beats by Dr. Dre. So far, we have no evidence that they're actually using a good DAC in their phones. They're just packing in overpriced headphones that admittedly mop the floor with the iBuds most consumers are used to, but do nothing to help out people who already own good headphones.
You might be tempted to praise Samsung in all of this, but seriously, hold your applause. The Galaxy S II which looks otherwise-amazing and should have been the perfect device inexplicably eschews the awesome Wolfson DAC from the original Galaxy S and uses a lesser Yamaha chip that pales in comparison. The VoodooSound developer was extremely frustrated at the change, because the new hardware wasn't even worth his time to write new drivers for -- heaven forbid, Samsung actually include good hardware and write their own drivers.
In any case, the future's still a pretty big black box. Hopefully the iPhone 5 will include some worthwhile hardware that will spur the rest of the market to react. In the meantime, an original Galaxy S device (including the Nexus S, which is the same hardware) is still a really modern smartphone that offers stellar audio output.
(this next bit only applies to Americans, but it's still worth mentioning)
-- If you're on Verizon, care about music, and still have an unlimited LTE plan, the Droid Charge is pretty much a no brainer.
-- For T-Mobile, it's basically between the Nexus S and the Galaxy S 4G -- the Nexus S has a better software situation going on, but the GS4G offers 48GB total capacity and has slightly quicker download speeds.
-- On AT&T, it's between an iPhone 4, a Samsung Captivate, and a Samsung Infuse. The Infuse is huge -- too huge for my tastes -- but it's got an improved screen over the Captivate/Vibrant/Nexus S. The iPhone 3GS is also a valid option, but if you can afford AT&T's pricing you can afford a more recent smartphone. If you can't afford the latter, switch to a less-expensive carrier.
-- Sprint's a sucky place to be. Your only option with a decent DAC is the original Samsung Epic 4G, and it's got a keyboard. Sprint's prices are also crappy, and their WiMax network is deployed on a useless band. Avoid Sprint, avoid low-quality audio, avoid pointless keyboards.
