How Beats maximizes cheap hardware for luxurious profits


Beats by Dre teardown
This is what the inside of a set of Beats by Dre Solo HDs looks like.
Photo: Bolt. Used by permission.

A teardown of a set of Beats headphones, which sell for hundreds of dollars at retail, revealed that the hardware contains less than $18 in components. And that sounds like the ‘phones are an insane ripoff, but that’s not even the most interesting thing we learned from the examination.

We’re used to hearing about how our expensive gadgets “only cost” whatever amount, but of course you’re not just paying for the parts when you pick something up. That price includes labor and manufacturing, as well as the research that went into designing it and future iterations, post-purchase support, and a bunch of other invisible costs like the non-specific luxury and status values of the product.

Cheap materials aside, Beats contain a bunch of very cool design decisions that also help keep the real costs down for their makers.

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