Why the recessed iphone headphone jack?

Apple has not officially commented on the reasons for this design decision. Good design is part of their core competency, and they have better things to do than to provide design manuals for their competition. (But it would have been nice if they had not been so dumbass as to claim "it is compatible with most portable stereo headphones".)

The recessed jack has been controversial, but there are (at least) two good reasons for their decision:

Firstly, the rounded edge. It's an excellent touch (it's simply nice to hold or pocket), and it is also structurally sound (makes the device more rigid). But there is no way to have a non-recessed 3.5mm jack on a round edge. So if you want to maintain design consistency, you need to recess the jack. And if you're going to recess it a little, you might as well recess it a lot. This is the "design purity" aspect that the marketing VP was alluding to.

But, secondly, and more importantly, durability. The biggest source of structural failures in portable devices (laptops, phones, etc) is the power connector and the headphone jack. In a small audio device, the headphone is the worst, since, by necessity, the connector will sit on the edge of a small (and thin) circuit board. By making the jack deeply recessed inside the aluminum (rounded) edge, the connection becomes dramatically more resilient. You can see the details of this if you look closely at the high precision with which the included headphone connector slips into the recessed hole (no coincidence), as well as how carefully that hole is centered on the aluminum frame. (As for power and laptops, of course, Apple has already rolled out the MagSafe solution .)