Leeds Crown Court heard that Oscar Abbey was found by his parents, caught in the side of his bed at their home in York.
On Monday, Craig Williams, the owner of the company which sold the bed to Charlie and Shannon Abbey, went on trial accused of gross negligence manslaughter.
John Elvidge QC, prosecuting, said Oscar died on November 3 2016 of positional asphyxia.
He said: "During the course of the night, he wriggled his body through the holes at the front of his cot bed.
"His head was too big to fit through.
"In effect, he choked to death. He was starved of oxygen."
Mr Elvidge told the jury: "He died because the cot bed bought by his parents from the defendant's company was designed and constructed without any care or thought for the safety of the child who was sleeping in it.
"Oscar died, say the prosecution, because of the defendant's gross negligence."
The prosecutor said Mr and Mrs Abbey bought the bed from Williams's Sheffield company, Playtime Beds Ltd, for £655, including delivery.
He said Williams was the designer of the firm's beds and "controlling mind" of the company, which had two other employees.
The company made bespoke, MDF beds in a range of shapes, the jury heard.
The court heard that the unit sold to the Abbeys included the cot and a bed for Oscar's two-and-a-half-year-old brother, Maxwell.
Mr Elvidge said Mrs Abbey specifically asked Williams before purchase: "What age is the lower bed suitable for?"
He said WIlliams replied: "Any age."
Mr Elvidge said Oscar had only started using the cot on October 28.
Williams, of Park View Road, Kimberworth, Rotherham, South Yorkshire, denies manslaughter and fraud.