I will more than likely oversimplify the issue, but the way I see it is that times are really hard on those in the middle, and the middle has always been the real bread and butter for most manufacturers. When I say manufacturers, I mean those with buildings, equipment, employees and quite often, payments at the bank.
Let's use turntables as an example. Right now, the low end of the market is selling very well. By low-end, I mean turntables like Crosley, the Audio-Technica, etc. USB ones, and to some degree the Project and Rega crowd. Also, the traditional high-end is doing just fine. By those. I mean the cottage industry ones that sell for 10K and up along with the flagships of larger traditional companies.
The middle, however, is tripping all over itself because the brick and mortar stores are becoming relics of the past, and those in the middle are trying to sell "me too" items a lot of the time. Many of their buyers are upside down in their mortgages, have lost their jobs, and have downsized everything. If you make a turntable that sells for 4-5K, forget about it. So, where would you go? If you try to compete with Crosley and Audio-Technica, not only are you out a small fortune trying to totally redefine who you are, but you will lose in the end because you cannot cover that market logistically. It's where the money is really, but the guys in the middle aren't financed well enough to compete there, and their heart isn't in it, anyway. Their only hope is to go after that unknown quantity, and that quantity is whatever the cottage industry has. None of them are sure what the audio underground is all about, let alone the amount of money there, so they have their fingers crossed that it is enough to satisfy their needs, and hope springs eternal for them that they will penetrate that area occupied by the Eastern European and Far Eastern crazies who know no spending limits. Besides, they have the tooling, the buildings and the employees, right? They all think they can capture the high-end market just because they are set up to do production, and they will copy each other, the cottage industry and traditional guys, and add in some bling and hype to make it sell. We are already seeing it, and some of them will succeed at the game. Most will lose, however, because they were faking it when they were in the middle, and that won't work for very long anymore.
The cottage industry guys and the SMEs of this world will survive because this is our playground, and we don't have the financial obligations of many of the "new to high-end" companies. It's my opinion that the next couple of years will be ones of change for a lot of the audio business, and some familiar faces will disappear forever. I believe those faces are the ones who are currently making the big changes in their target markets.
I could be wrong, of course.
That is a very interesting post. I suspect not only very informative but accurate as well. +1