But for those with more modest needs, there is no reason a well designed receiver or integrated can't provide every bit the SQ of separates - assuming selection is made with respect to the power requirements of the speakers it's paired with.
That's my point, flagship or near flagship dac chips and their implementation are relatively cheap and yet most integrated amp manufacturers still put the near bottom chips in their products. And if called out, they will tell you it's implementation that matters not the chips itself. Of course they are right about that, but then why not spend a few dollars more on better chips if so much efforts have been put on implementation.
People don't like to hear what I said about this, but if they pay more attention to the facts of their units they will often find that their integrated amp's can even play DSD256, in some cases not even DSD128 or PCM 24bit/192kHz (yes some can, but many cannot).
Examples of how they cheapened out on the chip:
- If they use the ESS Sabre IC, they tend to pick the lower models ES9006, 9016, or 9026Pro in the more expensive units, but you rarely see them using the ES9018, 9028, 9038 pro. Note: Parasound's latest integrated amp does have the 9018, finally.., capable of playing DSD up to 256 but not 512, still, I won't complain about the P6 except you can buy a $300 external DAC that can play just about anything and just use it with a plain old school style integrated amp and be further ahead of price and quality.
The Yamaha A-S801 has the ES9010K2M, that itself isn't bad but their Asynchronous USB implementation is so "good" that won't let you play DSD higher than 5.6 MHz (that is DSD128), their AVRs such as the entry level A4A can do DSD 256 (11.2 MHz).
It's not even about sound quality, but it's an inconvenience and disappointing feature for those who prefer to buy DSD256, 512 or PCM files with resolution higher than 24bit/192 kHz. Personally I don't believe anything higher than CD quality/16bit/44.1 kHz is necessary, but recording and mastering quality matters much more, and in my experience, it is easier to find files that are from masters of excellent recording/mastering quality.
- Some integrated amps, such as the A-S801, are still using the volume control ICs, that is basically the heart of the preamp section designed for AVRs, even the entry level AVRs. Here again, its not necessarily sound quality will suffer in any significant way but it is a matter of principle that if their marketing brags better sound quality than AVRs, they should invest just a few more dollars on the important volume control chip whether it would make an audible difference. The counter argument that why pay for if you can't hear the difference can of course make sense, but if they use that argument they would hard time justifying the price and they would have to tone down their marketing information that managed to convince a lot of their customers that if they want better sound quality they should use integrated amps instead of receivers and/or AVRs for music listening.
A note on potential cost savings by using cheaper DAC ICs:
Even if we ignore the implementation part but only consider the basic more costly items including the ICs and minimum op amps required, a two channel integrated amp would require a minimum of one two channel IC vs a 7.1 AVR's 4 such ICs, likewise for the OPAs.
So going from the kind of DAC IC they put into such integrated amps to the near flagship ESS or AKM ICs, they may have spend a few dollars to may be $20 in extreme cases such as using the ES9026Pro instead of the ES9006S, that's still a lot less than what it would cost to produce 7.1 AVRs using such premium DAC ICs.
Again, for audiophiles in the market for a good integrated amp with build in DAC, price will likely be important up to a point, but if you ask whether most would be willing to pay $25 to get the same unit but upgraded from the ES9006 that is used in their RX-A1080, to the ES9026Pro that is used in the CX-A5200 and RX-A8A I think the answer will more likely be yes, regardless...