I'd be very surprised if Linn genuinely believed that the Keel is going to make a significant difference to their fortunes. I think some of the comments here are a bit premature, i.e. I don't think that the announcement necessarily means that Linn is in trouble. FWIW I agree with Joel's comments. I think Linn needs to cater for the "iPod/Squeezebox" generation rather than go even more upmarket chasing wealthier but fewer customers. But hey, what do I know, I'm sure Linn know their customer profile better than I ever could.
BTW, selling tenners for a fiver will result in you losing money, Linn haven't yet reported a loss, so in their case turnover of £32million must mean that they are still selling products, albeit at relatively low margins.
I could mention a number of large corporations that seem to re-structure themselves on a regular basis. This in itself does not mean that they are in trouble, just trying to make the best returns for their shareholders.