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The typical stereo system is made up of a number of individual components.  We will discuss those various parts in this article. 

Speakers:

Just about everyone knows what speakers are.  Speakers convert the electrical signals emitted from the amplifier into acoustic energy or sound.  Higher-end speakers are often smaller and can be a little light on the bass, especially the lower priced ones.  It is actually an expensive undertaking to create a speaker which really has a deep bass sound, yet does not sound too heavy.   Therefore many designers of higher-end but lower-priced speakers have to compromise, building smaller, more rigid cabinets, sacrificing truly deep bass for tightness and instead diverting money they might have spent on larger boxes into drivers that will produce a musical midrange and smooth treble.

Amplifiers:

 A typical receiver is actually made up of three to four components. It will include a tuner, which is what you use to listen to the radio.  There is also a pre-amplifier, which accepts the signals from other components and permits to you to select which one to listen to, permits you to adjust the volume and amplification.  There will be a power amplifier, which accepts the signal from the pre-amplifier and produces the signal that is then passed on to the speakers.  If the receiver is one of the few that has a phono input, then it will also have a phono pre-amplifier, which takes the low-level signal from the turntable and amplifies it to a level that the main pre-amplifier can use.

Power Amplifiers:

 First we will discuss the power amplifier.  The power amplifier is to produce the signal that drives the speakers.  The higher watts produced per channel, the better.  Higher-end amplifiers are designed not only to produce impressive measurements on the test bench, but actually drive speakers.  Those amplifiers will almost always deliver a lot more current than a consumer one, allowing greater control over the speaker’s performance, and greater ability to respond properly to variations in that performance.  In a higher-end power amplifier, much of the cost is absorbed by the power supply that provides raw current to the circuitry.  This is crucial; the modulation of this current is the amplifier’s primary job.  The amplifier must be able to produce a clean, steady flow of raw current and prevent contaminants from entering that flow.

 Pre-Amplifiers:

One could consider the pre-amplifier the control center of the entire system, accepting input from source components, allowing the user to choose between them and then set the volume.  It will also provide amplification so that the signal will be powerful enough to drive the power amplifier.  There are many different sorts of higher-end amplifiers, including tube or transistor, or hybrids models which include both tube and transistor.  They are often rather minimalist compared with those found in the typical rack system. 

Phono Pre-Amplifiers:

These would really only be familiar to those of us who have still hung onto our old vinyl records, or those who now collect them for actual use.  A phono pre-amplifier takes the very low-level signal from the cartridge, applies the RIAA correction, and then amplifies the signal to a level that the pre-amplifier can handle.  The power supply is critical for good phono pre-amplifier performance.  In turn, good phono pre-amp performance is critical in order to get good sound from vinyl.

 Integrated Amplifiers:

The integrated amplifier combines all of the aforementioned components into one box (with the possible exception of the phono pre-amp which is a rarity for the reasons previously discussed).  Because of the physical makeup (one box), upgrades become a bit more difficult.  You would need to buy both a separate pre-amplifier and a power amplifier if or when you decide to upgrade.  The only way around this is to purchase an integrated amplifier with a pre-out jack on the back side, allowing it to be used as a pre-amp driving a separate power amp.

Source Components

CD Players and Accessories:

The primary component of the typical modern audio system is the CD player or its equivalent.  Any CD player is made up of at least three parts: the transport, which spins the disc and delivers the bits, the digital-analogue converter (DAC), which converts the bits into an analogue signal, and an analogue amplifier, which produces the current necessary to drive the pre-amp (discussed before).  Some CD players contain more serious analogue stages, as well as a volume control, and are thus capable of driving a power amplifier directly.  If you wish to have a digital-only audio system, eliminating the pre-amp can greatly improve the sound of a system since you will be getting rid of one potential source of sonic degradation, as well as one set of cables.  (You will also save money by eliminating this particular component.)

Turntables and Accessories:

Yes, there are actually some of us who still own and even listen to vinyl records.  You can even buy new ones.  We are the people who also believe that a good record played on a high quality turntable sounds even better than the best CD played on the best CD player, and it is not just nostalgia affecting our ears.  A turntable (or record-player) is made up of three parts: the turntable proper, which actually spins the record at the proper speed; the tone arm, which carries the cartridge and holds it as steadily as possible over the record groove; and the actual cartridge, which includes the needle or stylus, and the electronics needed to convert the mechanical energy in the groove to an electronic signal to be sent to the phono pre-amplifier.  All three parts work in accordance with each other and are equally important. 

There may be other components that various experts in the field consider to be just as important as the ones that we have discussed here.  The best thing to do is experiment to figure out what works best for you, and consultant a good sales person that you can trust with questions as you are building your system.