[Bansaku]

 This storey made me laugh so hard it made my face hurt! Really made my day. 

 
You may have seen this argument somewhere on the internet recently, it's a real growing trend. As soon as someone offers up the suggestion for Beats by Dre to be added to an audio collection everyone is up in arms about the sound quality and mostly the 'paying for the brand' experience.
 
 
These headphones that generally enter the market at $380 for higher graded models and have often made people wonder - how much 'brand cost' is actually associated with this device.
 

Well in case you missed it, All Hiphop released the news last year that Dr. Dre's magical sound devices cost an estimated $14 to produce.
 

Thanks to their marketing power, Beats by Dre owns around 27% of the headphone industry and pulled in over $1.8 billion in sales throughout 2013. Most of their profit margin does go into celebrity endorsements and advertising, meaning they can uphold a highly expensive campaign.


Read more at http://www.tweaktown.com/news/44111/miss-beats-dre-headphones-cost-14-make/index.html

 

[TheGoldenEars]

Amazing never expected them to cost so little! I guess this is why the sound has too much bass and is muddy...

 

[oqvist]

What are they basis that number from? 

 

[vantt1]

  What are they basis that number from? 

TweakTown said that AllHipHop said that The New York Times said that "Headphone designers estimate the cost of making a fancy headset is as low as $14." 
 

1. NYTimes missed the fact that Beats' most expensive set - the Pros - "only" cost $399 retail
2. AllHipHop misinterpreted "up to $450" as "upwards of $450"
3. TweakTown assumed "a fancy headset costs as low as $14 to make" meant "Dr. Dre's magical sound devices cost an estimated $14 to produce"
4. This $14 cost does not specify which model, and What are "headphone designers" and "a fancy headset" in the context of that article

 
Much credible. Wow. 
 
I'm sticking to my own estimates of:
 

1. As low as $5 for the in-ears
2. ~$20 for the Solos
3. ~$25 for Mixrs and old Studios (AAA-powered circuit)
4. Around $30-$40 for the Pros (passive, chiefly machined metal build), Executives (old ANC circuit, machined metal build) and new Studios (new li-ion powered (AC adapter is also thrown in now) ANC circuit and chiefly plastic build)
5. Up to $50 for the new Studio Wireless, which is programmable via USB and stuff

 
And that takes into account all the packaging, documentation and accessories. The more expensive models tend to have a bigger box (more cardboard) and more cables/adapters/accessories.
 
Oh yeah, don't forget these cost-adders too:
 

1. Almost exclusive use of painted plastic as opposed to pre-colored plastic
2. Detachable cables (more wiring, headphone jack) with Apple inline remotes (brings a licensing fee)
3. Exclusive use of steel/aluminum hinges in supra-aurals and circumaruals
4. And of course, machined aluminum in selected models

 

[crazychile]

Not a shock at all. The same is pretty standard with any product that spends tons on marketing and image. What do you think the actual cost is for a pair of Nikes that retail for >$100? I'm guessing less than $10.
 
I remember back in the 80's when there was a rumor that there was at least one pair of Bose speakers where the packaging cost more than the speakers themselves. I can't confirm this but given that Bose is so heavily marketing driven, it wouldn't be much of a surprise.
 
However to be fair, it's easy to confuse production and material costs with the actual cost of the product. I work for a company where customers often pay millions of dollars for a relatively small amount of hardware. The hardware costs are a small portion of the package. It's the thousands of associated engineering hours that make the products cost what they do.

 

[vantt1]

  Not a shock at all. The same is pretty standard with any product that spends tons on marketing and image. What do you think the actual cost is for a pair of Nikes that retail for >$100? I'm guessing less than $10.
 
I remember back in the 80's when there was a rumor that there was at least one pair of Bose speakers where the packaging cost more than the speakers themselves. I can't confirm this but given that Bose is so heavily marketing driven, it wouldn't be much of a surprise.
 
However to be fair, it's easy to confuse production and material costs with the actual cost of the product. I work for a company where customers often pay millions of dollars for a relatively small amount of hardware. The hardware costs are a small portion of the package. It's the thousands of associated engineering hours that make the products cost what they do.

+1
 
Companies like Bose, Apple, Beats etc. don't sell specifications. They sell "what you see/hear is what you get" consumer products, at a price. They don't spend money on expensive components or enthusiast grade hardware but instead on creating a product that appeals to the average consumer, and don't confuse them with arbitrary numbers that have little meaning.

 

[Bansaku]

   
I'm sticking to my own estimates of:
 

1. As low as $5 for the in-ears
2. ~$20 for the Solos
3. ~$25 for Mixrs and old Studios (AAA-powered circuit)
4. Around $30-$40 for the Pros (passive, chiefly machined metal build), Executives (old ANC circuit, machined metal build) and new Studios (new li-ion powered (AC adapter is also thrown in now) ANC circuit and chiefly plastic build)
5. Up to $50 for the new Studio Wireless, which is programmable via USB and stuff

 
 

 
+1 That's my estimates as well. I base it off my own experience in manufacturing, and know that cost of components and labour in industry is pretty consistent. And you know what, big box retailers don't spend that much more than for Beats than what you posted. Ever seen beats go for (constantly) 70% off? Retailers still need to make a good profit and they do, even at sale prices like that which is common. It's sad but that's the way business works.
 

 

[vantt1]

 
+1 That's my estimates as well. I base it off my own experience in manufacturing, and know that cost of components and labour in industry is pretty consistent. And you know what, big box retailers don't spend that much more than for Beats than what you posted. Ever seen beats go for (constantly) 70% off? Retailers still need to make a good profit and they do, even at sale prices like that which is common. It's sad but that's the way business works.
 

I've never seen Beats go for any more than 10% off, but they are often bundled with products that feature Beats Audio (namely, HP computers).

 

[money4me247]

lol i wld say that most audiophile headphones will probably have similar markups. at least 50%+ markup over manufacturing costs across the industry. capable dynamic drivers are not that expensive to manufacture.

 

[vantt1]

lol i wld say that most audiophile headphones will probably have similar markups. at least 50%+ markup over manufacturing costs across the industry. capable dynamic drivers are not that expensive to manufacture.

 
If we're talking just the manufacturing costs on their own, absolutely. But ratting out audiophile headphone makers isn't what the cool kids do these days 

 

[Flamess]

Wow. My new argument for the reason why beats aren't the best headphones in the world. (For virtually every person outside of head-fi.) xD

 

[vantt1]

I was going through my photos and realized that almost exactly 5 years ago, I bought the Syllable G05 from AliExpress for a cool $10.64. Avery Louie might wanna revise his estimate...again!

https://www.core77.com/posts/38467/...eats-Teardown-Apparently-Used-Beats-Knockoffs

 

[DenverW]

Everyone is neglecting to mention the care and attention that Dre puts into each beats headphone. He hand tunes each headphone personally in order to ensure only the highest quality. The man is a doctor, of course.

This kind of effort isn’t cheap.

 

[vantt1]

Everyone is neglecting to mention the care and attention that Dre puts into each beats headphone. He hand tunes each headphone personally in order to ensure only the highest quality. The man is a doctor, of course.

This kind of effort isn’t cheap.

Another reason why the Bill of Materials doesn’t tell the full story

 

[camskittles18]

To be honest, they sound like $14 headphones as well.