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I am sorry but I disagree with many of your points. It has been a misconception for a long time now that Separates always guarantee better performance. Until recently that may have been true, but it simply is not the case anymore.
Long time being a year or two? Because prior to the new 5803, I would maintain that the Outlaw combo kicked Denon's DACs
Small high end companies simply don't have the R&D expenditures, nor do they deal in the shear volumes, of the larger electronics vendors to design state of the art cost effective electronics. Many of these companies simply offer an OEM processor so that they can promote their other products (IE. Speakers, Amplifiers, etc).
I'm assuming that you mean comparable priced pre/pros and receivers.
If not I would have to disagree with you on OEM dollars spent vs high quailty output products Alot of these companies, especially Yamaha (which I consider to be the true underdog for Audio snob appeal ) have many lines of business. I do not know how they structure that corporately and how they funnel a portion of their profit back into R&D for audio purposes. It would be interesting to see what percentage of prfits gets allocated for R&D dollars in small companies such as Bryston, Anthemm SymAudio etc as they are considered to be mid to high end?
I spent several months with the Outlaw Clone Processor (aka Sherbour PT-7000):
PT-7000 Review
and found it was a very good processor in deed, but no match for many of todays A/V Receiver flagships, particularly the Denon AVR-5803.
Processors in the price range of these killer flagship receivers often lack the digital arcitecture for the reasons previously mentioned.
Careful, You would pick the Denon over a Krell or a MacIntosh pre/pro for 4000+ dollars?
In my opinion, here is a prime example:
Sunfire Theater Grand III
As for SNR, it may be more important that you realize, especially when dealing with DVD-A and SACD. We have learned this ourselves when comparing many similarly priced processors to that of the Denon AVR-5803 for example. A well designed receiver today typically has a good 5-10dB lower noise floor via its analog inputs and usually better DAC performance than many of the less sophisticated pre/pros.
Ignoring theoretical limits... Can you hear that difference in a DBT ?
If you are in a very large room with inefficient speakers and desire more power than what flagship receivers have to offer, you could always add an external two channel or multi channel amp to the mix.
We have found that receivers are evolving far more quickly than similar priced separates and the blanket statement that "Separates are better than Receivers in the same price range..." is no longer valid.
I have had people ask me in the past, "Why don't receiver companies offer a processor version of their flagship without the amp section and reduce the price?" The answer is, removing the amp section will have little to no affect on retail price! The reason being is the vendor will now produce a product catered to a smaller marketplace, thus the sales volume will decrease and the consumer will ultimately be paying the price. In a sense, think of todays high end receivers as excellent processors with a free amp section thrown in.
Is a receiver always the answer? Certainly not. However they have become an incredibly well integrated and value minded design that should not be overlooked, especially when faced off against similarly priced separates and tight on shelf space.
I will have to concede one point to you
in that today's Flagship monsters are of very high calibre and certainly have raiseed the bar in terms of performance. Lets see now if the seperates camp will pickup the challenge.
Just one more thing, Outlaw as dropped the price of their pre/pro by another 100..now rtailing for $799.
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