That's the best part though.

With an external PHY you can use single pair ethernet, which is much more suitable for use in embedded devices. Single pair ethernet directly competes against I2C and CAN, because you only need 2 wires for full duplex 100mbit/1000mbit connectivity.

Single pair ethernet also has the massive advantage that it isn't restricted to the garbage RJ45 plugs, which are basically a nightmare in embedded devices.