1986 doesn't have one singular headline moment in the way some years on this timeline do, and rather than force one, it's worth describing what was actually happening: steady, incremental progress. CD players continued getting smaller, cheaper, and more common in home systems, building on the momentum that had picked up the year before. Component stereo systems, cassette decks, and turntables remained the products most buyers were actually choosing between, even as CD's eventual dominance was becoming easier to see coming.
This is a good example of a year that mattered more for consolidation than for invention — manufacturers refining and cost-reducing technology that had already been introduced, rather than launching something new.