Never let it be said that Musical Fidelity is behind the curve when it comes to developing new products: in fact, the company has something of a track record for anticipating trends, not to mention attempting to start trends of its own.After all, it launched a standalone headphone amplifier in its tubular-cased X-Series range as long ago as the mid-1990s, and expanded that line-up with then-unfashionable products such as a DAC, a linear power supply for multiple units, and the first ever X-series product: the X-10D Class A triode line stage. The company's SuperChargers were launched back in 2007: powerful amps designed to fit between an existing amplifier and speakers, they had the simple task of boosting the power to deliver the full dynamics of the music.

In recent times MF has continued with a sometimes baffling range of products, from high-end amplifiers through to little boxes designed to add all kinds of features to a system, from headphone amps to phono stages to DACs and digital interfaces, and it was also one of the first British brands to have its own streaming solution.

So, it's not a company short on innovation – and the Merlin system looks like a fascinating combination of novel thinking and the addressing of current trends. Where's a lot of the action in the audio market at the moment? In vinyl, in Bluetooth streaming and in small systems: which is precisely why MF covers those bases with this £1299 'Multi-Format Audio System' of miniature amp and speakers, and partnering Roundtable turntable.

In a bout of Arthurianism the company has gone back to Camelot to name its new products, but has thankfully resisted the temptation to go as deliciously overboard with the theme as it did with the massive Art Deco Michaelson Audio Chronosof the 1990. However, the Merlin and Roundtable are very much of the moment, as I discovered when first encountering them at last year's National Audio Show, where company founder and boss Antony Michaelson was on hand to enthuse about them (doesn't he always?).

Michaelson has a very "well, we thought we'd give it a go, so here it is" way of describing his company's products, and in typical style he explained that he wasn't sure whether the new system was suitable for review in hi-fi magazines because "It's not for enthusiasts; it's designed for civilians". In common with other companies exploring new potential buyers and outlets (think Linn Kikoor mu-so by Naim), Musical Fidelity realises that we fanatics are a finite resource, and that an entire iPhone generation is out there, with money to spend on a system if only a) they can be shown that it'll make their music sound better, and b) no-one mentions the 'H-F' word.

The heart of this system is a Merlin amplifier that's fashionably desktop-audio-sized (just 22cm wide and 5.5cm tall) and has an absolute minimum of controls. It uses two digital amplifier modules within to deliver a claimed 40W, or 50W maximum peak, per channel into 4ohms, together with analogue-to-digital conversion to enable non-digital sources to be connected, and twin, 24-bit/192kHz DACs.

A solitary pair of RCA sockets can function as either a line-in or moving magnet phono input, the required function selected using a tiny switch. A dual purpose 3.5mm stereo/optical mini-Toslink input is able to handle the signal from the headphone output of a smartphone, tablet or whatever, or up to 24-bit/96kHz digital in optical mode. A USB-B micro socket provides connection from a computer (in place of the more common full-size USB-B): this is compatible with files at up to 16-bit at 44.1/48 kHz, and aptX Bluetooth connectivity is also available using an antenna supplied in the box.

It's worth noting that the USB socket seems a little more fragile than a full-size USB-B: reconnecting the micro plug for a quick listen after this review was completed, something gave way, and the socket vanished inside the casework, so servicing is required, so I'd suggest some care is taken with plugging this particular connection, and it should be left in place once it's made. (You might simply suggest that I'm a bit ham-fisted!) That aside, however, fit and finish here seems extremely good, and both amplifier and speakers have the feeling of being built to last.

Output is provided on a set of simple speaker terminals, as well as via another 3.5mm combination analogue/optical socket, with either variable or fixed level operation in the analogue domain – so a subwoofer can be added if required.

A standard 3.5mm headphone socket is also available, and Musical Fidelity says close attention has been paid to the quality of the headphone section here, which is based on its standalone headphone amps. The headphone section also has its own volume control to avoid excessive levels either when plugging in headphones or indeed when disconnecting them and going back to loudspeakers. The amplifier is controlled by a 'credit card' remote control for input and level; source/status selection is indicated by a row of little LEDs on the front panel.

The pair of Merlin 1 speakers are even more interesting, as they use a single BMR (balanced mode radiator) full range drive unit, an extruded main enclosure, and a novel 'multi-stepped baffle' covered in a range of geometric protrusions and designed to enhance dispersion and imaging. This bass reflex design has a rear tuned port to increase the bass, and an integral stand with two mounting points on the enclosure rear so they may be used horizontally or vertically. The speakers come complete with cables terminated with spade connectors, and are available in silver, black or the red of the review pair, to match the Roundtable turntable.

The turntable itself has an oversize solid plinth, mounted on compliant feet and – like the high density MDF platter – designed for high mass and low resonance, while Musical Fidelity says the motor, arm and other components have been arranged to put the centre of gravity at the point of the high carbon tool-steel main bearing.

The turntable has been designed to be simple to set up and use, and comes with its 9-inch straight arm (which uses bearings that combine steel tips, zirconium and rubber damping) already installed and fitted with an Audio-Technica AT95E cartridge. All the user needs to do is to plug in the off-board plug top power supply and interconnect cables, drop the platter spindle into the bearing, and fit the round section drive-belt to the platter and motor pulley. A felt mat is provided as standard, but the turntable has no lid or cover.

The power switch is under the front edge of the plinth, and speed is changed by moving the belt on the motor pulley: MF supplies gloves for belt handling (to avoid contamination), an alignment protractor and stylus downforce balance, plus an Allen key for counterweight adjustment (in the unlikely event that the cartridge is changed). The components of the system may be purchased separately, the amp and speakers cost £799 as a package (the speakers alone at £299), while the turntable is £599.

Straight from the box – the sample I received had previously been used, so I really can't comment on any running-in effects beyond the fact the sound does seem to get a little richer and more developed after about half an hour of use from cold – the Musical Fidelity impresses with a weighty, well-focused sound and an almost unfeasible sense of soundstage openness and detail.

To these ears the imaging was a little tighter when the speakers were used in 'upright' orientation, but the soundstage was rather wider and more three-dimensional when they were used 'landscape': I suspect personal preference will play a major part in choosing which suits any particular listener. What's certain is that the ovoid Merlin 1s sound unlike any other small speakers I've encountered, having both that unity of sound inherent in single driver designs and (with a little assistance from a not too-close rear wall working with their bass ports), a decent amount of low-end welly – at least by small speaker standards.

Due to its compact size and computer connectability, it might be tempting to view the Merlin system as a desktop audio set-up, and indeed that's a function it fulfils spectacularly well, being well-suited to near-field listening due to the dispersion characteristics of the speakers. The amplifier is more than powerful enough to rock you back in your office chair when used in this way, however, and I enjoyed everything from music stored on my computer to movie soundtracks and radio streams while writing this review, both with my Mac Mini connected via USB and from an iPad via Bluetooth.

However, what's even more surprising is that the MF system has decent room-filling (or at least small-room-filling) ability. With the speakers at the extremes of the speaker cables supplied (placing them about 2m apart), and used in horizontal orientation to give the most expansive soundstage, the Merlin system manages to deliver a sound that's instantly captivating and entirely involving.

Yes, it's a little limited at the frequency extremes, but the smoothing off of the highest treble and the lowest bass is of the 'sins of omission, not commission' kind, and more than acceptable given the compact dimensions of the whole system. Whether listening to one of the many rock stations out there on the internet, or the likes of Radio Swiss Classic (which does exactly what it says on the tin), the way the Musical Fidelity sounds goes a long way to living up to the Music is Our Religion slogan you'll find printed on the manufacturer's packaging.

The turntable, too, is very fine by the standards of decks at this kind of level, with an initial slightly sibilant edge to some vocals disappearing after the Audio Technica cartridge had been run for a day or two, and – whether through the Merlin amp or some rather more ambitious amplification – a good balance of vinyl warmth and smooth detail. With tracks such as the Rickie Lee Jones cover of Steely Dan's Show Biz Kids, the assured timing, tight bass and generous imaging of the singer's voice was especially persuasive.

Try as I might, I couldn't find my ancient LP of Rick Wakeman's Myths and Legends of King Arthur to suit the Merlin system, so had to settle for some gritty blues! And with rock material the presence and clarity are both impressive, especially if you wind the Merlin amp up a bit. Change tack to jazz and what grabs you from the off is the way the whole package delivers brass against a motoring rhythm section: it's clean, clear and immediately toe-tapping.

In fact, that's a definite trait of this little system: at background levels – or 'running in dinner party mode' as a friend of mine describes it – the sound is smooth and inoffensive, but crank the level up and things really start to get interesting. The bass fills out, treble detail suddenly sparkles through and a real sense of rhythmic drive becomes apparent, alongside better orchestral scale and recorded ambience.

I have to admit to coming to this system with divided thoughts. Yes, I expected good things given the brand, but still couldn't quite dismiss from my mind the worry that this might be a lifestyle move too far, and that those quirky-looking speakers might have rather more to do with style than substance. I really needn't have worried: the Merlin system, and its partnering Roundtable turntable, more than meet up to their brief, and even have a spot of magic going for them.

If you're after a second or desktop system, or a main system for a modestly-sized room, and fancy something different with more than a spot of style on its side, this compact package deserves a serious audition...

...Even if you're not a civilian.