My interpretation is that Monster went into free fall after losing the lucrative cash cow of manufacturing all the headphones for Beats Audio.

A $200 headphone only costs $5-$10 to manufacture and package because all you're doing is sub-contracting out to Chinese factories that pay a few dollars a day in wages. Even if you spend $40 on marketing per unit, you come out way ahead. That's one of the reasons why there's so many online wristwatch start-ups, because a $120 quartz watch or $500 mechanical watch with leather strap and sapphire crystal only costs $2-$5 each when purchased in batches of a thousand.

Beats secretly went into direct negotiations to be purchased by Apple, and that required cutting Monster out of the deal. Monster made a lot of enemies along the way, they even sued Disney/Pixar when "Monsters Inc." came out (and apparently won), so no one was feeling sorry for them. I think retailers only put up with them because of the huge markups that come with selling a $20 surge protector for $300.

Beats is now another Ralph Lauren, Tommy Hilfiger, or Yves St. Laurent and appears to be focused exclusively on licensing.

Author of "Status 101: How To Keep Up In A World That Keeps Score While Buying Into Buying Less"