Correct, iPhone 7 can't work as a phone if it doesn't keep a DAC inside. THIS solution is just a redundant one. Now you have a DAC inside and another DAC outside. The spin is that this means better quality but the cheap adapters may not have a better DAC than the one inside. As I've posted in other threads, if this change is about delivering better quality audio, it seems the best option would have been to put any of these better quality DACs and AMP
inside the phone. Of course, that might have added a few nickels to the cost of each unit, so that's a stupid idea. It's much better to embrace the redundancy and have us consumers pay up for variations of the very same technology OUTSIDE of the iPhone.