The dawn of the CD era began in the early 1980's and at that time there were initially only two CD players mass marketed: Sony and Phillips made both and each were marketed under multiple brand names. Soon after, Yamaha followed with their own licensed version but so far no high-end audio company had yet ventured into the fray. PS Audio would change that with the introduction of the CD-1; soon followed by a number of others in the high-end space.
The players of that era sounded promising but also bright, hard and fatiguing, for the most part. The Phillips players, marketed in the US under the Magnavox brand, were considered to be better sounding than the Sony versions - although (and of course) opinions varied wildly on that one. This era was also the days of the receiver as king; consumers were just discovering they could buy a Japanese receiver and get lots of watts at a low price. It was also the era of the crossover between tubes and solid state electronics in the high-end market and those wars were raging loudly.
If you think about it, this was an amazing period of time; a crossroads between technologies, cultural shifts and a huge and growing audience of consumers who wanted music in their homes and had an increasing multitude of choices at their disposal. Most high-end companies of that day were choosing their battlegrounds and claiming their turf; PS Audio was no different. We had decided the future was to be found in solid state and digital audio although we knew it would be many years before these technologies would be capable of delivering universally desired results.
We bought our first CD player, a Magnavox unit, and set to listening to it compared to vinyl. Screech! Not good at all, but something familiar was showing itself the more we listened. The sound was very reminiscent of the bright, hard and fatiguing qualities of the Japanese receivers of the day. Combine a CD player with one of those receivers and it was beyond tinny and flat; it wasn't worth listening to.
We knew from our decade of experience, relating what we heard to what was going on in the circuit, that these two manufacturers most likely put all their time and research into the CD and digital audio and then slapped a power supply and analog output stage on as an afterthought. It was the same mentality the receiver folks used: spend all your efforts on the features and slap on an output stage at the end of the chain - never once realizing that doing this had really bad results for those of us that wanted the sound quality of vinyl.
We did a simple experiment with that Magnavox player: replaced its output analog stage and power supply with one of our own just to see if we were right. Bingo. The CD player sounded, for the time, light years better than the stock Magnavox - despite all the digital problems it had (that none of us understood at the time). Indeed, we then knew that we could turn any receiver or poorly designed consumer product into something decent sounding by simply replacing the output stage with a better sounding one.
Some would call this adding lipstick to a pig, and you wouldn't be too far off, but the truth was this pig sounded pretty darned good and much better than any CD player of its day. We released this as a product called the CD-1 in the early part of the 1980's and soon followed it up with the world's first outboard D to A processor in high end audio. Others like Arcam and Theta were on parallel courses and within a few months of our release of the first high-end DAC countered with versions of their own.
There was much to learn as we moved along but at least we knew there was hope for the fledgling compact disc as a format and we now had confidence the fatigue and hardness in those early players was not inherent in their digital technology, just their implementation. That was a good thing to know as we now understand in hindsight.