Beats by Dre Headphones taken apart and priced. Results shouldn't surprise you

KEW

KEW

Audioholic Overlord
$1.80 for the stereo drivers and $4 for the box!
That is the strategy that makes Dre successful!
I wonder how much assembly costs.
 
BoredSysAdmin

BoredSysAdmin

Audioholic Slumlord
Chinese assembly minimal wage is about $1.5 an hour with optimized product lines - I won't be surprised of several dozen in an hour.

I find this phrase most hilarious in Engadget article:
"Apple can be a bully"

Said the kettle to the pot...

Try to google for "monster cable lawsuit" and it returns over 107,000 results !!!
 
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lsiberian

lsiberian

Audioholic Overlord
$1.80 for the stereo drivers and $4 for the box!
That is the strategy that makes Dre successful!
I wonder how much assembly costs.
They are handmade after all.
 
KEW

KEW

Audioholic Overlord
Less than $10 if you don't count the packaging. Crazy.

Sent from my LG-VS980 using Forum Fiend v1.3.1.
All of the pricing on the packaging mat'ls seems way too high. That must be an internal department that is getting preferred treatment.
 
Lulimet

Lulimet

Full Audioholic
I don't really have a problem with it. If the market will pay $200 for something that cost $17 to make then that's what its market value is. It's just how things work in capitalism.
Who are we to tell Beats how much to sell their product for?

Take Apple and their new Watch for example. It was reported that the cost for the leather bands they sell for $60 was a little over $2. Yet people don't care. They happily pay those prices.
 
agarwalro

agarwalro

Audioholic Ninja
This adage comes to mind, "A fool and his money are easily parted".
 
rojo

rojo

Audioholic Samurai
Or, "There's a sucker born every minute."

Sent from my LG-VS980 using Forum Fiend v1.3.1.
 
tyhjaarpa

tyhjaarpa

Audioholic Field Marshall
Have always known beats were over priced, but didn't know they were this hardly over priced tho.
 
jinjuku

jinjuku

Moderator
There are also the factors of R&D / Product prototyping. Then there is inventory housing and distribution.

I have no problem with this other than I don't care for their product sonically.
 
Alexandre

Alexandre

Audioholic
There are also the factors of R&D / Product prototyping. Then there is inventory housing and distribution.

I have no problem with this other than I don't care for their product sonically.
Thank you! I always have an issue with this kind of "research". I worked in software at Apple for years along with hundreds of other engineers on Mac OS X and iOS, and when someone lists out things like "the iPhone only costs 63$ to make — made that up by the way — it omits so much stuff!! When you go to a restaurant, or buy a pastry somewhere, do you get all up in arms over the fact that your $3 Danish costs 20c of sugar, butter and flour? Who's counting labor, recipe development, testing, staff, rent, etc? It's the same for electronics, there are a lot of costs beyond just the bill of materials and yes, at the end of the day, they also want to make money.
 
jinjuku

jinjuku

Moderator
I understand the reaction however. I recently posted about a quote for a $650 brake job on my Infiniti (rotors and pads).

I understood that the shop has considerable overhead. In the end I just took 75 minutes and ~$150 in parts and did it myself.
 
BoredSysAdmin

BoredSysAdmin

Audioholic Slumlord
Thank you! I always have an issue with this kind of "research". I worked in software at Apple for years along with hundreds of other engineers on Mac OS X and iOS, and when someone lists out things like "the iPhone only costs 63$ to make — made that up by the way — it omits so much stuff!! When you go to a restaurant, or buy a pastry somewhere, do you get all up in arms over the fact that your $3 Danish costs 20c of sugar, butter and flour? Who's counting labor, recipe development, testing, staff, rent, etc? It's the same for electronics, there are a lot of costs beyond just the bill of materials and yes, at the end of the day, they also want to make money.
Labor (or an estimation) was included, staff - this one is duplicate, rent/mortgage are cost of biz but not consumers problem.

It's given that even these crappy headphones if trully sold at $17 - they would lose money, but the question is : Even including research, testing, supply chain etc.. let's assume each part gets a 10% reasonable margin (given high volume it more than adequate)

So I'm going to speculate if these would sell at $50 each, at high volume (and these are) there would be decent profit for everyone in the chain.

but at $200 each - sorry - this is pure shameless money grab scheme.

Alex, do yourself a favor and read the article. How Beats added (rather expensive and unnecessary) pieces of metal to make them heavier and feel more "solid"
 
BoredSysAdmin

BoredSysAdmin

Audioholic Slumlord
I understand the reaction however. I recently posted about a quote for a $650 brake job on my Infiniti (rotors and pads).

I understood that the shop has considerable overhead. In the end I just took 75 minutes and ~$150 in parts and did it myself.
I get it - supply and demand. Garage has expenses etc.... but really - a car mechanic charges over $100/hour?
This is on par or even more expensive than most IT professionals would charge.
 
Alexandre

Alexandre

Audioholic
Alex, do yourself a favor and read the article. How Beats added (rather expensive and unnecessary) pieces of metal to make them heavier and feel more "solid"
You're right, I should have started by reading the original article, mistake now corrected. I was responding mostly because of the reference to the apple watch BOM.

In the case of Beats, I don't really care for their headphones. That having been said, the article does even mention that it is making assumptions and is omitting a number of things in its estimations. On top of that and as jinjuku mentioned, costs like rent and marketing cannot just be discounted as not the consumer's problem. Do you think Beats would be able to get this kind of prices on parts and tooling (the estimate assumes 1+ million units built) without marketing? Would they be able to sell that many units without paying rent for their business operation locations? You cannot dismiss those as business problems, those are parts of the costs of building things. ;)

I'm not saying that these headphones aren't overpriced, not at all, they probably are but saying they only cost $17 to make is a bit unfair.

Alex.
 
slipperybidness

slipperybidness

Audioholic Warlord
The problem is that almost all the $ goes into marketing, very little $ went into serious engineering or quality parts.
 

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