What's going on with the audio market?

Interesting perspective merrillaudio, that is a different view from where I see it.
I have to question your point number 2, as I see "better" as subjective, faster I can agree with, though this isn't necessarily always a good thing, but cheaper? I don't see this.

 I have seen companies go in two directions, cheaper, and more expensive. It's the middle ground that seems to be disappearing.
Companies like Wilson, ARC, VAC, Vitus, Nordost, Tara Labs, etc., are making gear more and more expensive every year. So I have a hard time seeing that new products are cheaper. Maybe cheaper to manufacture, but the list price still goes up.

I've always scratched my head when I read that the advertisers target the younger crowd.  I'm 62 years old and have a LOT more discretionary income than about 99% of those "gen whatevertheyarecallednowers".

Back in the late 70's/early 80's I worked at some high-end audio shops and the ebbs and flows in the sales cycles defied reason.  Yes, we were prepared for a slowdown in purchases during the summer vacation season, but I'll never forget watching NBC news, unemployment ticked down, interest rates ticked down but for some reason people stopped buying audio equipment for the next 2-3 months.

High-end audio is such a niche market, I don't think the larger trends in the economy effect the sales of this sort of equipment so much.

A good example of "cheaper". Is the Bel Canto C5i integrated I picked up recently for my second system.    It has everything in one small shoebox sized package and the sound would satisfy most anyone I suspect with most any speaker used.   60 watts power is its only limitation.   It goes loud but not to real life levels some might want with less efficient speakers but loud and clear enough for most.   

It's all the hifi 99% of folks out there would ever need or want.  Nice headphone amp as well.  

I think there's a recent shift in emphasis on what high-end audio manufacturers are making, which may leave some of us old troglodytes (64 in my case) behind. Flavor-of-the-month seems to be music streaming as opposed to physical media, the latter being what most of us grew up with. My theory is that younger buyers, fewer of whom are audiophiles, are more focused on convenience and portability than actual audio quality. (Some of the blame here might rest with the advent of the MP3 format, the first time in the history of recorded music that the public demanded a LOWER quality of sound). While there remains a dizzying variety of traditional equipment still in production, I agree with many previous posters that prices have butted their heads against the ceiling of affordability, and the market is at or near saturation. In my area (Northern California) there are still a fair number of high-end audio stores and they show no signs of distress yet, but most concentrate on home theater which is where the money is at the moment.

merrillaudio4 posts05-27-2016 9:53amHere is my 2 cents from a manufacturer.

1. Sales are good.

...only need to know location and even if you do, it's worth LOTS of LOTS of money to settle so profit not guaranteed or highly jeopardized. Otherwise sales... Don't even think of dealing high-end components unless you snatch a nice storage unit for cheap or sweep through tempting estates. 
Ordering new high-end products and selling via retail store -- WASTE OF TIME and MONEY no matter whatcha do.

Dealers need retooling.

retooling implies expenses that should be ALWAYS part of equation.

1. The older buyers are downsizing.
2. The new products are better, faster and cheaper.

...the new products are better and cheaper isn't true at all. compared intro prices 10 years ago and found 40% increase in average. don't find new products ANY better at all. They're just advertised better and nothing more.