Maybe rather conveniently, but Linn seem to have a slightly definition of a source, also if you go to the Exakt forum the system seems to be a bit more complex than what's been said here, and indeed, the DAC is in the speaker itself and absolutely the last in the chain before output (but there's a lot of complexity which has me scratching my head if you read the forum further with more responses from the engineers), so this response from a Linn engineer:
Hi Macrotech,
"Source" is an overloaded term which may be what is causing the confusion.
If "source" is used as in Linn's philosophy of "source first", then the strap line makes a great deal of sense. In a source first design, the source is the first component that causes loss to the signal.
For an LP12, CD12, KDS, or KDSM, they were indeed the source as they were the first place loss was introduced.
In an Exakt system, the Exakt DSM losslessly sends the digital signal to the Exakt Speakers over Exakt Link. The Exakt Speakers are now the first place in the playback process where loss occurs and, as such, they are the source.
In a network sense, the KDS, KDSM, and Exakt DSM all remain "players", but the Exakt DSM is not a source in the source first sense.
Keith
What's confusing is that even though there's a DAC in the speaker that's just before output, it's not clear if there's ADC conversion for the supposedly analogue amplification.
Additional info:
The (mandatory) Exakt DSM has analogue inputs, and thus an ADC, but no DAC and thus no analogue outputs. And it retains network streaming functionality too - like a normal DS.
The digital crossover is called the Exakt Tunebox - and has presets for the Linn Klimax Exakt 350 speakers which incorporates the DACs and amplification.
Current analogue Klimax 350 speakers can be upgraded to Exakt.
Most interesting: the Tunebox will have an open interface and will be ultimately compatible and configurable with 3rd party or non-Linn speakers.
Linn are making claims, as are some guests who've heard the system, that a LP12 sounds better through Exakt! So in essence Exakt seems to be a very high-end hybrid digitising and streaming system compatible with analogue sources.