Well, this is not entirely true. Do you guys familiar with iMod (and gMod, the Malaysian version of iMod)? Take a look at iMod at http://www.redwineaudio.com/imod.html or at http://www.audiolineout.net. In short, iMod is a modified version of iPod, where the signal out of the iPod's internal DAC is tapped directly, thus bypassing the internal amp and the noisy electronic circuit of the iPod (I will not pretend to understand all of this technical stuff, you can go ahead and read the detail at the websites I mentioned above). The owners of iMods swears that the SQ of these modified iPods are amazing, some even said that they are on par with dedicated hi-end CD player. You can find what iMod owners have to say about their iMods at http://www.head-fi.org The interesting thing is, Vinnie, the guy who made the iMod, said that he will not offer iMod for Classic iPod, because he said that the SQ of the Classic is so good that even though his 5.5g iMod is still sound better than the stock Classic, the difference is not that much to justify the cost of the modification. You can read what Vinnie said at http://www.head-fi.org/forums/showthread.php?t=259258 So it means that yes, apparently Apple is also pursuing improvement in sound department.