I would go would source, preamp, speakers then amp.
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The choice is too system dependant. Any component could be the weakest link. Cables can be the difference between good sound and "magic", so they are important too.
I say buy the best speakers you can and work from there. Amp and pre-amp choices will synergized with the speakers. Source components improve most any amp/speaker combo. Use cabling to fine tune your system. Change the speakers and you may need to start all over except for source gear.
You won't get anything in the way of a clear answer to you question...if you do a search you will find this has come up many times...you may even find someone starting with a power cord...HeHe
I start by listening to speaker systems, some people buy over the web based on research and opinions without first listening...I don't. Once I find a pair of speakers that I'm sure I will be able to setup properly so as to maximize their full potential...I begin to ponder components...amps next.
Choices here are vast and by now I'm able to shrink my choices down to several thousand...after all, speaker choice will dictate amp choices...and of course the room comes into play again...ie, i'll need to reach fairly high SPL's at times.
Next I move on to the preamp...of course I now know my amp choice which dictates types of preamp I'll research...passive designs could shine with the right amp so those may also be on the table...along with solid state and tubes...again, lots to ponder and this is the point were neutral could give way to flavor...my ear, my choice...there is no right or wrong direction here...this is about fun and enjoyment.
Last...Source, just as important as everything else in truth but I usually have and like several...constant state of flux for me so I would never start here...technology moves fast in this area.
Cables: laster than last.
And of course room treatments for those that can at the end.
Speakers are the most colored component in the system. Different brands/topologies sound very different, so you first need to find a pair that you like. Nothing you put upstream from your speakers will make you happy unless you have a pair of speakers that suit your tastes.
The requirements of the speakers you choose will then determine what type of amplifier you need. For instance, if you like power hungry speakers like Magnepans then you have to get a powerful amp. On the other hand if high efficiency horns are more to your liking then you need a low power SET.
There is no way of getting around this fundamental principle of building a system so the speakers must come first. You can then choose components that complement the speaker and amplifier.
IMHO, For the most significant to least significant difference, my vote is for:
the room, speakers, preamp, source, amp (assuming the amp mates reasonably well with the speakers, so no SET's with Apogee's), cables.
In chronological order (which to choose first):
speakers, the room, amp/preamp, source, cables
I agree with Hack, though would add power (specifically dedicated lines) as being only slightly behind cables/wires. I came to this conclusion kicking and screaming, initially placing a much higher priority on speakers than on source (dead wrong, but some of us are slow learners). Any speaker manufacturer - Wilson springs quickly to mind - who tries to tell people otherwise is working a scam, as far as I am concerned.
Of course if your system is wildly unbalanced by one poor component, including speakers, it is not going to sound good. Balance and rationality is still of great importance in deciding on upgrades.
I also used to adhere to the philosophy that you should start with the source, which is a very logical assumption, but after trying it both ways I came to realize that the colorations introduced by average speakers will be far greater than those introduced by average electronics.
The best speakers in the world with average electronics will still sound very, very good.
Average speakers with the best electronics in the world will sound average.
Start with the speakers.
Looks like I agree with you for starting a system: pick your speakers, then match their power handling limit to the rated output of a power amp. Then get a preamp from the same company as the power amp. Now that you're broke, get a cheezy DVD player to spin CDs until you can't stand it anymore and buy $20/pair interconnects and a spool of speaker wire at Radio Shack.
For upgrading what you already have, the trick is use all your senses to figure out where the wrinkles are and then address them as they manifest themselves. Sorry there's no formula I know to achieve that.
I think there is no "right" answer to your question. Speaker selection is Very important, but so is the preamp, poweramp, and particularly the source. Ultimately, it is the synergy between components and cables in the system, and the weakest link that will give it away. If your system had good but revealing speakers like, for example, B&W N-805, it would not sound good with a poor digital source, and you would be much better of with speakers offering less details and resolution. On the other hand, an excellent source, is more likely to provide a more positive overall effect in your system regardless of other system components. So in regard to your question, you really need to be more specific as to what the current components are...
I hate answers like this, but, it depends! I've been doing some upgrading over the last year. I started the upgrade process with some pretty good speakers (magneplanar 1.6 QR) that I was ready to sell because my system sounded pretty awful. Thinking through a few questions before I started helped me significantly improve my system without overspending.
Q1. What don't I like about the current sound?
Answer: Digital glare, grain, weak bass, room resonances, poor soundstage.
Q2. What is causing what I don't like?
Answer: Digital glare--CD Player, grain-- cables and amp, weak base--amp, room resonances-- corners that needed treatment, poor stoundstage-- CDP, room, and speaker placement.
Q3. I've got a lot to upgrade, what's the biggest bang for the buck?
Answer in order of impact:
#1 Room treatment for $100 made a huge difference
#2 new DAC
The learning points for me were
1. Good speakers + bad supporting equipment & room = bad sound
2. Be patient. Try to identify weak links in the system. Upgrade one thing at a time, understand if the change fixed the perceived problem before making the next sysmtem change.
3. Look for well reviewed/high resale value equipment. This allows you to experiment and resell if your equipment if the change doesn't address the problems.
4. Have fun and enjoy the music!
Abaseballfan 1, I think your on the right track. My suggestion would be to (1)st consider your real world budget, (2)nd your audio room and how long it's likely to be your audio room (power outlets, equipment racks, placement, seating postion and room treatment options are all part of this consideration), (3)rd speakers, (4)th amplification, (5)th control center (pre-amplification), (6)th sources, (7)th cables. Caveats, (2) room treatment may need to be readdressed after speaker choice, (5)control center may be somewhat dependent on (6)sources, after all you'll need enough inputs and out-puts depending on the number and choices of sources, this is futher complicated if video and/or surround sound is part of the system.