Steve would roll in his grave. He had Magnepans.
The quality of the audio electronics in iPhones is quite alright. The iPhone's have measured well and sound quite OK given the limitations on space and power. The standard earbuds provided with them are poor quality though, and as an electronics engineer, audio engineer, and musician I would be quite disappointed if Apple allowed this sound reproduction shortcoming to persist. Monster Turbines like the Copper Pro are substantially better than Beats, so upgrading quality might happen, and what I say will be irrelevant.
I want Apple to continue to strive for excellence in quality, and not to let that focus lapse if concentrating on branding and market share.
The iPod and iPhone earbuds seem to me to be an anomaly. They are one of the few areas where it appeared style trumped substance. I can get similar Chinese knockoffs for about a dollar from different places. The cirrus chips and surrounding electronics in the iPhone, and Wolfson's in some iPods are quite capable musically.
My point is more about the legend of Jobs the perfectionist that I've heard so much about in these and other pages. If he were to turn his attention to the earbuds and headphones then I find it incongruous that he would have let the reputation of mediocrity with the Beats sound rest unopposed.
I myself see this as a slide away from innovation.