Recently, Panic noticed the odd output resolution and MPEG-like artifacts with the new Lightning digital AV adapter and decided to take a hacksaw to it. They found an ARM processor inside.
Shortly after, they received an anonymous comment that explains it all:
The reason why this adapter exists is because Lightning is simply not capable of streaming a “raw” HDMI signal across the cable. Lightning is a serial bus. There is no clever wire multiplexing involved. […] We did this to specifically shift the complexity of the “adapter” bit into the adapter itself, leaving the host hardware free of any concerns in regards to what was hanging off the other end of the Lightning cable.
This system essentially allows us to output to any device on the planet, irregardless of the endpoint bus (HDMI, DisplayPort, and any future inventions) by simply producing the relevant adapter that plugs into the Lightning port. Since the iOS device doesn’t care about the hardware hanging off the other end, you don’t need a new iPad or iPhone when a new A/V connector hits the market.
While I understand what they are trying to achieve, I think it’s sad that this new Lightning system can no longer carry the uncompressed HDMI output. Maybe they could have streamed the raw video output in a format close to what HDMI expects, then have the adapter add headers and trailers to the data, but that would still be tricky since the system needs to stop sending frames while the adapter is doing its work. And what about HDCP?
Just one of the many tradeoffs that engineers need to make.