In a Las Vegas hotel a few days before the start of the Consumer Electronics Show on Jan. 10, Interscope Geffen A&M Chairman Jimmy Iovine takes out an iPad and swipes through photos of celebrities wearing headphones from Beats Electronics, the company he co-owns with rapper Dr. Dre. There’s Nicole Kidman, the late Steve Jobs listening to his iPod, and Kobe Bryant sporting a pair in L.A. Lakers purple. Before Beats, “Guys were making headphones that looked like medical equipment,” says Iovine.
Nowhere to be found among the photos is Noel Lee, the chief executive of Monster Cable Products, which has manufactured the headphones under exclusive license since their debut in 2009. The partnership between Beats and Monster, an electronics company best known for expensive stereo cables, has been an unmitigated success. Its products captured 53 percent of the $1 billion annual headphone market last year, according to researcher NPD Group. Now the partnership is coming to an end. Beats has opted not to renew its five-year contract with Monster when it ends late this year.