You might be familiar with Sonos’ high-quality music gear, which lets you stream tunes anywhere in your home over its own Wi-Fi network. The new S5 is a set of self-contained powered speakers that can expand an existing system or serve as the starting point for a new one. Intriguingly, the S5 lets you take a pass on Sonos’ effective (but pricey!) $349 dedicated remote, offering a free iPhone app to control all your Sonos gear.

The S5 works with existing Sonos hardware or on its own as a standalone unit. If this is your first Sonos device, you’ll connect it with an Ethernet cord, streaming music through a wired network. You can cut that cord, but you’ll have to add a Sonos’ ZoneBridge ($99) to go Wi-Fi. We wish the S5 could directly connect to our established Wi-Fi network, but maybe Sonos is right in isolating itself–music streaming always felt snappy and responsive.

We tested the S5 over both of those connection options, and the included Mac utility got everything singing in minutes, pointing the player to your iTunes files or other sources. It works with all major audio formats, including MP3, AAC, WMA, Apple Lossless, WAV, Audible, and more. You can simultaneously scrape together several music libraries from different computers or even connect directly to a network hard drive without leaving any Macs running. And the S5 plays a multitude of internet sources, including streaming radio stations, Slacker, Pandora, Napster, and Rhapsody.

Use the S5 to wirelessly beam your iTunes tracks anywhere.

The S5 sounds excellent, cramming great fidelity into a small space. While its small size offers limited stereo separation, its two tweeters, two midrange drivers, and one bass driver work in concert to create a complete tonal range at any volume. The S5 is loud enough to power an impromptu party, or you could use its sleep timer to gently help you nod off without sacrificing audio clarity at low volumes.

Several extra features are useful in certain situations. A headphone jack lets you listen alone, while an audio-input minijack turns the S5 into an instant iPod speaker. If you own other Sonos hardware, you can even stream audio from that input to other networked gear in different rooms.

The iPhone app interface quickly queues tracks, launches playlists, and otherwise navigates the S5. It includes nearly every feature as the dedicated remote; we didn’t miss anything. You’ll turn to the Mac software for the deepest preference control–such as resetting the wireless network channel–or you can use the Mac interface as another controller. We wish, however, that Sonos didn’t cause confusion by placing important iPhone app preferences, alarm features, and other settings behind the Music button.

We liked the S5 and applaud the ability to control it with your iPhone. Still, Sonos’ dedicated controller beats the iPhone, hands down. With the iPhone, you’ll first have to fish out your phone and launch the Sonos app. It can then take 5 to 10 seconds to load and connect to the S5. If your phone goes to sleep, it’ll take a few seconds to reconnect, and once in a while, we had to completely relaunch the app because of an error. Essentially, the iPhone remote strips away some of the usual it-just-works Sonos magic… though it’s hard to complain too much about a free app.