Gaz37 said:
I know what they are & (roughly) what they do, what I'm struggling with is why they vary in price from about £9 on amazon to several hundred quid for big name stuff.
How much do you need to spend on one for it to be better than the one already inside your CDP & wouldn't you get a better result by just buying a better CDP?
These days, electronics are damn near free. A good example is a Raspberry Pi, a fully functioning computer with power equivalent to a desktop computer of only a few years ago for less than £30.
Electronics scale well. The initial development costs are very high, but once the plant is up and running, the marginal production costs are very low. A simple example. Assume it costs £1,000,000 to develop a chip, and £1 each to produce. Sell 1 chip and you need to sell it for £1,000,001 to break even. Sell 1,000,000 chips and the selling price is now £1.
Same is true of hifi. If you are a small hifi firm with low volume, your costs get amortised over a small number of units. Lets say your DAC cost £1,000,000 to design. Sell 1000 DACs at £1000 or 100,000 DACs at £10. Same DAC, same quality, just reaping the benefits of economies of scale.
So, the main reason for price variation in electronic devices these days is the volume of production. Fancy 'hifi' DACs may have an expensive aluminium case, but the innards are not that much different from a cheapy DAC for a 1/10 of the price.
Back to your question, a CDP is a good place for a DAC. From a cost perspective, you don't need an extra box, and from a hifi perspective you dont need to use a S/PDIF link which has a whole world of issues of its own.