You'd never guess it was there—a tiny chip, barely a millimeter square, hidden inside the headphone module on the third-gen iPod shuffle. If you dismantle the module itself, you still won't see it: it's underneath a board containing a few simple copper traces, itself minuscule, and glued to the plastic. Even the traditional iFixit teardown gallery missed it.
We decided to take a closer look after iLounge reported that the third-generation iPod Shuffle's headphones had an "authentication chip" that Apple could use to turn something as basic as headphones into a proprietary licensing scheme.
By adding such a chip to headphones, Apple could force third-party manufacturers to pay fees to make headphones for its iPod Shuffle—after all, the device has no controls, so normal headphones are useless.
"This is, in short, a nightmare scenario for long-time iPod fans," wrote iLounge's Jeremy Horwitz. "Are we entering a world in which Apple controls and taxes literally every piece of the iPod purchase from headphones to chargers, jacking up their prices, forcing customers to re-purchase things they already own, while making only marginal improvements in their functionality?"
Even if someone invented headphones that worked without a licensed chip, that could amount to circumvention of a digital lock: Apple could shut them down using the Digital Millenium Copyright Act, provided the signal sent from the headphone buttons to the iPod itself is encrypted.
http://gadgets.boingboing.net/2009/03/14/we-found-the-chip-in.html
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