The two make an odd pair. With a smooth baritone, Mr. Young spun tales about gangs, sex and crack in South Central Los Angeles into multimillion-selling rap albums. In person, Mr. Young, a burly 46-year-old, says little and chooses his words carefully.

Mr. Iovine, 58, made his name as a record producer. He is also credited with helping to discover Lady Gaga and Eminem, whose demo tape he gave to Mr. Young. A slight, wiry and hyperactive Brooklyn native in blue-tinted glasses and a baseball cap, Mr. Iovine talks so much more than Mr. Young that he jokes, “I’m his Charlie McCarthy, I really am.”

Beats was a result of a chance meeting on a California beach several years ago, Mr. Iovine said. Mr. Young lamented that his lawyer wanted to peddle Dr. Dre-branded sneakers. Mr. Iovine responded: forget sneakers, sell speakers (although he used a different F-word).

His interest in getting into the headphone business was prompted by what he calls a steady decline in the quality of audio equipment and of recordings, as they have been compressed into digital files. That process allows more songs to be loaded onto a mobile device, but doing so eliminates some of the music’s complexity.

At that time, Mr. Iovine said headphones had become a commodity, and “everything that came out kept making the sound worse, and worse and worse.”

He continued: “You wouldn’t watch ‘Avatar’ on a small screen with a blurry picture, and yet people were consuming music like that. So we said: ‘You know, everything else out there looks like medical equipment right now. Let’s make it look cool and have a good vibe about it. But yet make it powerful.’ ”

The duo signed a deal with Monster Cable, which makes cables for audio and video components, and it spent several years perfecting a design, Mr. Iovine said. The first pair of Beats was released in the fall of 2008, about the time the slowing economy went into a tailspin. “Everyone told us it was impossible,” Mr. Iovine said. “We just went for it.”