Audiophiles (broadly speaking, even if - like myself – they really don’t want to be called that) and people working with audio bought those, hardly anyone else. Those aren’t the people who buy Beats. That’s a totally different (and much smaller) market.

Getting people who don’t care about how their music sounds that much and who don’t work with audio to seriously consider buying $300 headphones, that’s the achievement.

Those people used to either use the headphones that came with their devices, or they bought some cheap headphones (way under $100, probably even way under $50). Beats managed to attract those people to their products and managed to sell them to them for substantially more than they were previously ready to spend on headphones.

That’s what’s meant when people talk about Beats creating a new market. Buying expensive headphones just wasn’t a mainstream thing before Beats.

Honestly, I don’t even have much of a problem with that. People spend more money on better headphones. Sure, they spend too much for merely average headphones, but those are already better than anything they had before and once they buy into them I think it becomes way easier to convince them to try other headphones. Who cares if they spend too much?