Lower latency = less lag between an action and a result. For wired CarPlay the results of an action (skipping a song, play/pause, etc.) are near-instant. At 300ms there's approximately a 2/3 of a second delay (600ms round trip) between the action and the output. This is as fast as the latency can be set for the Carlinkit unit, however it can also result in audio skipping if bandwidth is insufficient to buffer the audio stream (as would happen to me running the Carlinkit 2.0 and 3.0.) To overcome this, you can increase the latency to the point where it buffers sufficiently but less than is aggravatingly slow to respond (for example, at 1000ms latency, you're looking at a whole 2 seconds between an action and response.)
With the Carlinkit 4.0 I'm able to run at the fastest latency with no audio buffer issues, which is the ideal scenario and was not possible with the earlier versions (again, this seems to vary widely among users so I might just be lucky.) Really the only downside at this point is the battery drain; I want to retrofit the wireless charging cubby in someday, but for now I just use the adapter for short trips and plug in for anything longer than 30 mins or so.
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