The Secret Scam of Cheap EarbudsS

Those cheap earphones you keep buying year after year? The ones with the cool designs? They all kinda sound the same, huh? There's a pretty good reason for that: They actually are all the same earphones.

In the world of gadgets, earphones occupy a decidedly weird space. Few categories can boast mind-numbing variety (both in price and quality) that headphones offer. Every year, companies like Sony trot out a phalanx of multi-colored ear candy at CES, each with various frequency responses and designs. You can pay as little as $10 for a standard pair earbuds, or drop as much as $2,000 for a pair of custom molded in-ear monitors. The space in between these extremes is even becoming crowded, with offerings designed specifically for running, yoga, juggling chainsaws—basically any activity you can conjure up that can be done while listening to music. And that's not even getting into traditional over-the-ear (or on-ear) cans.

Turns out, all that variety can be misleading—particularly when you look at the lower end of the market. While the sheer number of options from companies like Skullcandy and Scosche may suggest otherwise, you are definitely not buying a unique sonic snowflake when you opt for the Asym Rasta IEMs.

"The simplest way to get into the industry is to choose something that looks and sounds reasonable and have it printed and packed with your name on it," says Neville Stuart, principle research engineer at Bowers & Wilkins.

That's precisely what the Skullcandys, Cobys and iLuvs of the world are doing—with great success, too.

The Secret Scam of Cheap EarbudsS

According to recent CEA figures, shipment revenue for wired earbuds will top $447 million this year, with a projected increase of another $10 million by the end of 2011. This, despite an average factory manufacturing price that continues to hover around $8.

With an increasingly low barrier of entry, the low-end market has exploded over the past few years. It caters to you—and everyone else who either needs to replace prepackaged MP3 player garbage, or craves something less ugly to stick into the sides of their heads.

"The sub-$50 earbud market has become a completely commoditized space," says Seth Burgett, president and CEO of Yurbuds. One where everything from design to tooling is outsourced to handful of manufactures in China and the Far East.

Here's how things generally work in the world of cheap earphones: Every fall, two enormous tradeshows take place in Hong Kong: The Global Sources Fair and the Hong Kong Electronics Fair. Like CES and the Adult Entertainment Expo, they tend to overlap by a few days. And like CES and the AEE, there's a lot of cross-pollination between attendees.

While neither event is limited to just headphones, the first focuses on parts. Here, you'll find the rubber grips guy, the knobs guy, the capacitive amplifier guy—the whole family. The second fair is all about finished goods; you can wander through row upon row of "finished" reference designs. For a lower-tier company, these events are heaven, and usually the basis of next year's line-up.

"You basically get spec sheets from these manufacturers and then a la carte what you'd like to see," says Burgett.

Take a gander at any of the catalogues handed out at these shows and you'll see what he's talking about. These 200-page books feature hundreds of ISO-certified specialty manufacturers and suppliers, each hawking their ability to copy popular designs, come up with their own designs, and, yes, simply slap your company's logo on one of their offerings.

The Secret Scam of Cheap EarbudsS

"When we say our earphones, headphones and other items are customizable, we mean it," reads one such ad featuring a giant pair of pink cans. "Just select the model of your choice, and you can adjust the parameters, colors, logos, prints and even choose the packaging."

"Our 10 R&D engineers create 15 new headphones and earphones monthly," reads another. That's a lot of headphones and earphones. And necessarily so. Because lower-tier earphone companies generally don't employ designers or engineers, manufacturers have a huge captive market. And a good design doesn't have to be expensive. Especially when you crib from someone else's.

Understandably, there aren't many people in the industry comfortable talking on the record about this, even those who consider themselves above the fray. But the ones we did speak with only reinforced this sad state of affairs, albeit off the record.

"What companies like Skullcandy will do is go to these shows and ask these factory guys what headphones they have this year," said one exec at a well-known headphone company. What follows is essentially wholesale, unrepentant copying-sans the quality components. A company will select a popular reference design, tell the manufacturer to slap their logo on the side, maybe change a few colors around, order a few thousand, and call it a day.

The Secret Scam of Cheap EarbudsS

What you end up with, of course, are earphones that have the same middling performance and are largely built in same factory.

Others will take a piecemeal approach, opting to deal with the parts guys and then select one or two factories to assemble their buds. Things get incredibly incestuous here too, as Neville notes.

"There are probably thousands of different manufacturers of 15mm earbud speakers, but only a handful of those have any significant acoustic competence," he says. "Some make good copies of the market leaders' designs. But some of the market leaders are using copies, which means that some are copies of copies, including the mistakes."

It's a simulacrum of suck!

So if these collaborations inevitably result in nothing more than rebranded mediocrity, backed by companies that spend more on marketing than anything else, why do consumers keep coming back? The answer shouldn't surprise anyone.

Sound quality remains one of the most subjective and personal measurements in the gadget world. Unlike video, there is no industry standard for good sound, no benchmark to say whether what you're hearing is sonic gold or audiocrap. In it's stead has emerged a particular fixation with brand, which works to the distinct advantage of many of these companies.

While there's been movement away from the prepackaged garbage that comes with bundled your media player, the sub-$50 realm of the earphone market continues to thrive, based largely on its ability to market the hell out of its products and push style over substance.

The Secret Scam of Cheap EarbudsS

Which leads us back to a point we've made before: Please, if you care about music, spend a little extra on earphones. Provided that your source material is decent, even spending $100 can make a world of difference. Yes, sometimes it's hard to resist a clever design, or sleek packaging . But the law of diminishing returns is in your favor. Make the jump from a $20 earphone to a $100 one from a reputable company and you'll hear what you've been missing.
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And if you don't believe that, well, I urge you check out my new line of Cranium Crackers™ this fall. They'll come in tons of hot colors and have sick bass too.

Original art by guest artist Chuck Anderson. See Chuck's work at www.nopattern.com and follow him on Twitter.

Images courtesy of Global Sources and Sergey Dolya