The iPhone's headphone jack is recessed so far into its body that hardly any third-party headphones actually fit.
You could just buy an extender but that only pipes the audio from your iPhone; for the full iPhone experience, you need a mic and a clicker; the first to let you make handsfree calls and the second to control the iPhone's playback and accept and end incoming calls.
This little adaptor lets you do all this and still use some decent headphones rather than Apple's poor white buds. It's not a perfect system; unless you have a very short cable from your headphones, you'll need to manage that extra cable, and while the clicker has a pleasingly positive action, it's bulky.
Worse, after only a few days of use, the fabric-covered cable showed signs of distress at the point where it joined the 3.5mm jack; we can't comment on the connection's longevity yet but it doesn't inspire confidence.