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.

The Beats breakdown, which involves a set of Solo HDs that sold for $200 when they launched in 2013, comes courtesy of prototype engineer Avery Louie. It gets pretty deep into exactly how the hardware is designed and built. Here are some of the things we learned about the premium headphones.

Each set contains fewer than 40 components

When you think about deconstructing sophisticated and expensive hardware, you probably expect to end up with hundreds of tiny bits spread out all over your table. Not so with Beats, which contain a relatively modest 37 pieces.

This isn’t incredibly surprising, considering a set of headphones, however “premium,” is typically not going to have all of the chips, batteries, and moving parts of a desktop computer or a smartphone. And the newer Solo 2s and Mixr models almost certainly have a few more bits stashed inside them. But it is strange to see them all spread out and taking up so little space.

Beats Solo HDs
Above: $90 in hardware that you originally could have bought for $1,000.
Photo: Evan Killham/Cult of Mac

Only eight of those components are screws

To save time and money during construction, most of Beats’ parts snap or are glued together. This is a pretty common manufacturing technique, since it’s easier and faster to push pieces together or apply glue than it is to install hardware.

But even Beats couldn’t avoid them entirely, and the designers had to resort to tiny bits of metal to fasten the speaker grills to the ear cups.

Four pieces of metal exist only to make the headphones heavier

This sounds like some shady practice, but Louie says that “a little bit of weight makes the product feel solid, durable, and valuable.” And he’s right; a solid-feeling product is really just something that people like to have. For example, I use a $40 headset for Skype and audio recording, and they feel like they cost $40. They’re light, the moving pieces rattle around, and the part that fits over my head flexes pretty easily even though it’s a single piece of plastic. Despite how useful and long-lived as they actually are — and they’re pretty great, don’t get me wrong — they just don’t give off an air of quality.

Beats are made to project luxury and premium status, so the manufacturers want to make sure that they feel solid and durable. And that’s why almost a third (29.5 percent) of a set of Beats’ weight comes from four pieces of zinc with no other purpose but to add that heft.

These headphones aren’t built or designed differently from any other high-end electronic, but this teardown provides some really interesting insight into what happens before our stuff shows up on shelves or in our mailboxes.

  • CelestialTerrestrial

    Just because a company pays $18 (guesstimate) for a product that sells for $200 isn’t a ripoff. It’s the kind of margin the company needs in order to make a decent Net Profit. Remember, they probably have to replace a lot of product under warranty claims, they probably have to end up giving huge discounts when they get stuck with lots of unsold product sitting in a warehouse when they are phasing out a model for a newer one. They also have to spend tons of money marketing the things because if they can’t generate huge sales, then the company loses money. It’s not uncommon for a pair of headphones to cost 1/10th of the MSRP. That’s probably the only way these guys can turn a profit.

    • Not just Beats, All brands/manufactures everywhere.

      • joe joe

        Except China.

    • Wirehedd

      Those of us who buy from suppliers like Monoprice and or Focalprice have known this for a while. I can buy a set of over ear cans that would be hundreds with the “prestige” name badge but instead I buy them unbranded and get them for a little over manufacturer cost. My sons have bluetooth 4.0 headsets that are over $200 each from their original producer yet were bought for under $30 per set. They work as well as or better than any previous sets and we’ve been using them at a daily duty cycle that has already killed one of my sets of Bose noise cancelling headphones but those BT sets are as good as they were a year and a bit ago when new.

  • Kostner Guyton

    Don’t forget design, Beats are very stylish, and that certainly adds value.

  • JimGramze

    I don’t care for the Beats Solo, but I really like the Beats Studio wired headphones that I tried and then purchased. I put them on a par with the top-of-the line Sennheiser wireless headphones that I paid twice as much for.

  • B.I.G. Forever

    When Monster owned Beats a few years back I tried them out and quickly dismissed them. I felt the sound quality was sub par at best. Unfortunately, many of the Beats naysayers harken back to those original, Monster Beats when they review or talk about the product. Newsflash, the new Beats hardware is WAY better.

    I own the Beats Wireless and PowerBeats2 Wireless and for Wireless headphones they are phenomenal. They are $75 too much – yes – but still great.

    I believe Apple bought Beats because Beats essentially made the first, successful wearable ever (fuck everyone who comes back with Polar or Nike Fuelshit etc).

  • Mo Ham

    Only stupid trendoids buy this garbage because “Dre” says they’re cool. If you want a good pair of cheap headphones go to Walmart and buy some Sony’s.

  • Glenn Gore

    A teardown based on a set of headphones Beats sold in 2013, BEFORE Apple bought them (the sale was finalized August 1, 2014) should not be laid at Apple’s doorstep because of shoddy workmanship or materials. Since the purchase, Apple has switched manufacturers and upgraded the components in the Beats line of headphones, so please get back to us with a new, actually current and up to date with today’s products, article based on what Apple is selling right now. I am not at all saying that Beats headphones are the best and finest quality devices made on the planet, but I am saying this article is based on old news.

  • dfs

    Apple/Beats sure are doing a lot of this. The MacRumors site recently reported that the base price of the sports strap for the Apple Watch is two bucks. And then there’s that $400 stainless steel bracelet band. I don’t buy what “celestial Terrestial” says just below. Clearly there’s a “designer label” factor at work here.

  • imtough

    Just bought a pair of wireless PowerBeats 2- don’t care what their margin is, I love them.

  • duradulova

    Shame on them! To hell such kapitalism!

  • Ren Medalla

    I can’t believe that this article hasn’t been updated with the fact that the 4 “useless” metal pieces are components of the hinge mechanism. They’re there to ensure that the folding mechanism doesn’t break apart like it would if it was made of plastic. This site is responsible for propagating the original author’s lying claim about the metal parts. I say he’s lying bec there is no freaking way he would mistake the hinge mechanism as having no use at all.