I don't know if I can agree with that. Any digital audio system is exactly that, digital. It's made up of offs and ons. Anything between the off and the on is lost. However, earbuds are analog, but the device sending the signal is inherently digital. We cannot create what is missing from the digital recorded media in the first place. The advantage of AAC is that it is very high bandwidth digital and does not compress the existing data by throwing away what is considered by many programers as being outside the range of normal human hearing which all other sound storage and transmission systems routinely throw out to save file space and network bandwidth.
The problem with that is such frequencies that are thrown away as "useless" and "unbearable," do actually create beat frequencies when the higher frequencies are included which ARE within the range of human hearing and add to the quality of the sound when played back in a room or even a high quality headphone. Remove the higher frequencies and those beat frequencies will be missing in the playback. These beat frequencies are very difficult to record because they are dependent on the venue on the performance, the listening area, walls, absorption, and/or microphone placement.
You just hit the heart of the matter, that many audiophiles call “high frequency harmonics”. Think of someone striking a cymbal with a stick. Was that stick wood, metal, fiberglass or plastic? Each will create a slightly different impact and initial sound. Was the metal brass, or steel? When we are live and in a room; the difference is apparent and profound. But upon recording, this difference quickly is lost.
Or, imagine being in the woods on a cool summer morning. A bird chirps close by. Without looking, your brain automatically targets that birds position as behind you, over your left shoulder, approximately 20 feet away and about 10 feet off the ground. You slowly turn around and your eyes know exactly where to look. How did this happen? Timing, phase data of the sound waves, attenuation of sound in the air at the time, temperature and altitude you are familiar with. The brain and our ears are remarkable instruments.
Yet, a child can tell the difference between a live performance and a recording.
My problem with Apple is that they have put tremendous technical effort into the aesthetic and engineering of the earbuds - but the quality of the sound lags behind competitors products that are much cheaper. Wish they used higher quality drivers.