That's too bad. At least HDMI out on Switch Lite is good news. Honestly, allowing HDMI output with a separately purchased dock would have been a good idea from Nintendo, even if it was just limited to 720p. Even if you're an exclusively handheld player, sometimes you have friends over and you just want to play some multiplayer Smash or Mario Kart. Not catering to those people was a bad move from Nintendo. They would have made more money from selling JoyCons and docks too. And all it takes is a $1.40 chip (the USB/DP matrix switch, checked on DigiKey) to enable docked mode. So the lower price of the Switch Lite doesn't justify the omission.
Because the smaller size of the Switch Lite makes it better for on the go use, I would be a big fan of the idea if it still had the *option* of docked play, but omitting it completely just makes it a worse Switch to me.
I wonder if this chip could be soldered into a Switch Lite to get 1080p docked mode back. In theory it should be possible as the same SoC is used in the red box Switch so both the SoC and firmware are capable. That is something
@MatinatorX should look into before going ahead with the 720p only idea.
Chip is listed here although not in stock:
https://www.digikey.com/products/en?keywords=PI3USB30532
But they should be easy enough to find in stock elsewhere as they are used for Switch repairs.
For that matter, it doesn't even need to be that specific chip. As long as the 1080p video out is available from the SoC pins (which it should be, being the same SoC as the red box Switch and the same firmware), any MyDP chip should work. Using that specific one would just allow existing Switch docks to work, including the official one if partially disassembled or put into another case.
Or it should even be possible to go with the micro HDMI idea and wire it directly to the 1080p video output. But using a MyDP chip would allow it to work through the USB-C port without needing to mod the case which is obviously a lot neater.
Thinking about it, I'm about 80% sure that it should be possible to get 1080p video output out of the Switch Lite, so there is very little reason to do it the other way and MITM the LCD screen. It's largely the same hardware as the red box Switch after all and all the important parts except for the PI3USB chip seem to be there, and it runs the exact same firmware.
It may require modding the firmware as there might be a switch that disables the 1080p video output on that particular model of Switch, which obviously makes it unsuitable for legit use so it's not a perfect solution. But it sure would be nice to have the option. If that is the case then it would be nice to have a switch to select between 720p and 1080p output, using 720p only in OFW. Would obviously increase cost and complexity but 100% worth the tradeoff.
Not that being stuck with 720p is all that bad since you can force docked mode clocks to run the games at the same performance as docked mode (and many games don't run at more than 720p in docked mode anyways), but if 1080p is at all possible, that would be the ultimate solution.