Audioengine recently released a premium 24-bit DAC (digital to analog converter) that lets you bypass your Mac headphone jack and send the audio through a USB port. The result is an audible and sometimes dramatic improvement in music quality. The D3 is US$189.00, a very reasonable price as high-quality DACs go.
The D3 DAC allows you to stream bit-perfect native 24-bit/96 KHz HD audio. Installation is simple. The hardware unit looks like a small thumbdrive, and its aluminum housing is a perfect match for a Mac laptop. There are no drivers to install; you simply select your sound system in the preference pane and the DAC is recognized as an output device. Plug in some high-quality headphones or powered speakers and you are ready to go. There are two small LEDs on the D3 -- one shows power from the USB bus; the other shows the presence of a data stream above 48K. For listening, volume is controlled from the volume control on your Mac.
Because the D3 essentially replaces the Apple sound system, anything with audio will come through the D3, such as a game, a movie or any sound file Apple supports.
I gave the D3 a spin on some Apple lossless audio files and everything sounded excellent. Comparing the quality to the output of my built-in headphone jack was a challenge, because the D3 output is "hotter" than the regular Mac output. Adjusting for that, the audio through the D3 sounded cleaner. Quick transients like plucked strings and percussion had more of a bite to them. The sound of massed violins sounded less "electronic". Bass was deeper, but also more clearly defined. I also listened to some high-definition files from Reference Recordings, which were running at 96 KHz. The sound was obviously improved through the D3. MP3 files sounded about the same through the Apple headphone jack on my MacBook Air and the D3.
As an aside, a lot of the high-definition files I have are in FLAC format, which iTunes does not support, but the Apple Store came to the rescue with an OS X app called FLACTunes FLAC Converter ($3.99). You drag your FLAC files onto the app window, and they are converted to Apple lossless format and placed in your iTunes library.
My listening tests were done with B&W P3 headphones, Sennheiser HD600 headphones and Emotiva Airmotiv 4 powered studio speakers. The more challenging the music, the more the contrast to the basic Apple audio.
If you want the best quality from your digital files, the Audioengine D3 is worth serious consideration. Unlike some DACs, the headphone amp is built-in, and under some very challenging musical files, I never heard distortion or breakup.
Another popular product with similar features is the AudioQuest DragonFly DAC. I have not tested the DragonFly, but users give it good reviews.
I'll have to return my review sample, but certainly will buy one to use for my laptop and desktop Mac. It's that good.