Beats were the first full-size headphones on the mass market that solved the problem of compact and/or low-wattage gear not being able to drive "good" headphones. The engineers and designers did this by integrating the amplifier onto the main unit. This allowed them to push major bass (the primary noticeable difference to the average American consumer, since high-end headphones most often lacked bass if underpowered).
I stood in a Best Buy store a few years ago and overheard two high school students talking about the Beats Studio. The one asked the other when putting them on his head:
"Dude, have you tried these? It's like they have subwoofers IN them!"
I shook my head as I was standing there, partially due to the apparent lack of knowledge in the area of audio terminology, but mostly due to the lack of other mainstream options available in the store at the time to help the consumer make an educated purchasing decision. When Bose and Beats are all that they had out for consumers to actually hear before purchase, consumer knowledge will suffer simply because consumers at large won't buy an audio product over about $50USD without first hearing it (unless they're nerds like me).
If nothing else, upon trying them I discovered the vast spectrum of sound that was missing compared to offerings from other brands for a fraction of the price (leaving out the cost of a discrete amplifier).
After Christmas last year, I decided to use my gift cards and Best Buy Reward Zone points to buy a good set of cans. The last set I had were my trusty Sennheiser 515s and I remembered being really impressed with their sound and build quality when I bought them in 2004. I admit I did briefly consider Beats before deciding on HD598s. I've occasionally tried Beats products in Best Buy stores since then, and the first thing I always notice is the oversaturation of bass relative to the lack of mid- and high-end.
I respect the vast marketing that made them so widely recognized, but the product itself is overpriced and an example of Apple-esque marketing: Make a product good enough for the average consumer and market it to the point where it is coveted.
My SRH840s and my cMoyBB "beat" the pants off a pair of Beats any day.
Edited by 4-HGeek - 3/1/12 at 9:24pm