What every phone maker could learn from OnePlus

April 23, 2014

So, the OnePlus One is out, and yes, you will need an invitation to buy one. Some have voiced their concerns about this novel method of purchase, while others have been outright in sounding their disappointment.

However, what amazed me the most is how many people are willing to whip out their credit cards and buy a phone they’ve never seen before, made by a Chinese company that’s barely five months old. Sure, there are some vocal naysayers, but it’s clear they are actually a minority, and the OnePlus One launch has been, all things considered, a success.

oneplus one vs oppo find 7 aa (10 of 15)

How could this be? OnePlus doesn’t have a single commercial on television, nor any printed ads, not even banners on the websites that we enthusiasts frequent. Yet most self-respecting Android fans have probably been familiar with the One for months!

From  the battery capacity, to the 5.5-inch 1080p display, to the processor and the amount of RAM, we’ve been familiar with the OnePlus One’s main features long before the product was even close to launch. That’s in stark contrast with the secrecy that surrounds most other smartphone releases.

By slowly lifting the veil on the One, OnePlus created genuine buzz, in blog posts, in comments, in forums, on Reddit and on every other channel where phone enthusiasts congregate.

oneplus one aa hands on (31 of 33)

Managing to build this much hype around a product that came out of nowhere — while spending next to nothing — is commendable in itself. But OnePlus’s clever and unconventional approach does not end with drip-feeding information to potential consumers.

OnePlus also used the two-way nature of internet channels like forums and blogs to gather input from fans and gain insights into what the enthusiasts actually want from their smartphones. By doing so, the startup fostered a sense of belonging among their fans that could, in theory, turn them into ambassadors of their products in the future. Because if we felt we contributed to building something that we are proud of, we would be compelled to share it with the world, right?

While big name companies are spending millions in their endorsement programs, One Plus One has potentially recruited thousands of brand evangelists from all across the globe, for free. How smart is that?

OnePlus team

From the interview they gave to Android Authority a few weeks back, we learned that One Plus is not planning to generate profits out of their devices. In fact, Carl Pei, director of One Plus Global, said that the company is not planning to make any profit at all in the first two years.

One Plus is not planning to generate profits out of their devices

In order to do that, it’s imperative for One Plus to keep costs down. The company is planning to do this by selling its products solely through e-commerce, in effect cutting out the middlemen and the overheads of normal distribution channels.

Another way to minimize overhead is clever inventory management, which is usually a bane in any hardware startup’s existence. Make too few units, and a lot of people may potentially go upset over how hard it is to get the product they wanted. Make too many and you could expose your nascent company to huge risks. Indeed, One Plus’ execs admitted this in their Reddit AMA, saying that “a miscalculation here (inventory) could kill us.”

oneplus one vs oppo find 7 aa (7 of 15)

Yet OnePlus’ mastery of unconventional, two-way internet channels has allowed it to turn this potential stumbling block to their advantage.

On the surface, it might seem that the invite system will only serve to make it harder for interested buyers to get the One. However, the invite model will allow OnePlus to not only gauge demand accurately (and thus avoid the risk of sinking money into unsold inventory), but will also create a sense of scarcity that could make the One even more desirable.

So, here we have a new company that’s looking to disrupt the smartphone market.

The plan is simple:

  • Avoid competing with the rich kids in marketing spending.
  • Instead, offer a product that’s built (at least partially) with the feedback of a budding community of enthusiasts.
  • Build up buzz for the phone through affordable, unconventional channels.
  • Sell it at a cut-throat price, made possible by doing away with conventional marketing and sales methods.

Will such a left field strategy have any chance to succeed though? Luckily we only need to shift our focus slightly further to the east to get an answer to that.

oneplus one aa hands on (32 of 33)

there is the proof that these unconventional business and marketing models could succeed in challenging the big players

In China, there is another startup that also started life making smartphones tailored to run a popular custom ROM. It’s Xiaomi, which has been doing what One Plus is currently doing for the past three years. The results? According to TrendForce, Xiaomi is currently the 7th biggest smartphone brand in the world, in control of four percent of the world’s smartphone market. That is the same as Sony’s, but Xiaomi is currently only operating in three markets outside China.

So there is the proof that these unconventional business and marketing models could succeed in challenging the big players. The biggest difference is Xiaomi started by catering to the Chinese market first, and then proceeded to slowly expand outwards. OnePlus is aiming for the global market from the get go.

The following months will show us if OnePlus is truly able to replicate Xiaomi’s local success on a global scale. One thing’s for sure though – companies looking to upset the balance of the mobile battleground can learn a thing or two from OnePlus’ fresh approach on sales and marketing.

Comments

  • ved prakash

    kudos to one plus :-)

  • Sekky

    that’s a nice approach from 1+, hope they are continuing there strategy!

    • Shark Bait

      they cant, its not a sustainable strategy. First off they don’t make any money, but that’s ok for now because its a market share grab atm. Also I guess they are a small company now, with small overheads, and dont have to offer and support to old products like the big guys do, all of which will change. And then as the company grows their speed and agility will slow.

      They have done a great job in coming to market,but I don’t see it being a sustainable strategy.

      • Boonlumsion Piyapon

        OnePlus was founded by Vice President form OPPO. and we know how OPPO set there Price.

        using Cyanogen mod reduce R&D cost. remove MicroSD card slot also save some license’s fee.

        We just don’t know how Cyanogen,Inc will make profit. But don’t make money form product “aim for service” can be a good strategy.

  • Guest123

    The “catch”, if you will, is they have to ultimately execute on all fronts.

    The build quality has to be good, not your typical direct from China knockoff/low end junk, and customer service cannot be your typical “Asian customer service” = once you buy we don’t give a crap.

    The Software has to be excellent, not your typical custom ROM that’s buggy/partially working and gnaws on your battery like a dog with a bone. And an easy to unlock boot loader — isn’t that the whole point here.

    Finally, to sustain this into a second generation they will need to have fast quality updates, and bring in some killer features — think Moto X innovation and CM Privacy Guard.

    If they fall off on any one of those the community will turn on them instantly and they’ll be SOL.

    • http://www.AndroidAuthority.com/ Darcy Alexander LaCouvee

      1. Having seen the devices that come out of their factory I can assure you they are not ‘junk’ they give many flagships serious runs for their money
      2. They partnered with Cyanogen and Steve Kondik – who are Android rockstars plain and simple; the OS will rock and it will be updated continuously
      3. This remains to be seen but these guys are hungry and on it.

      Let’s hope they can make enough of them to satisfy the demand.

      • Luka Mlinar

        Cyanogen is for me hands down the best selling aspect of this phone. Even if the price was a 150€ more i would still consider it worth it. Here’s hoping CM partners with someone else to make more phones. Hopefully ones not brick sized.

        • http://www.AndroidAuthority.com/ Darcy Alexander LaCouvee

          Definitely agree about the size – it’s far too big. 5 inches max, with no bezel, I think, basically, is the perfect size, and even then, that’s pushing it. I’m going back to a smaller device soon.

          • Luka Mlinar

            You don’t hear that often. I’ll buy a moto x as soon as i get the chance. For me that phone has a bunch of useless cores but the size and shape of that phone sells it alone.

          • Manda_Panda_III

            When you do go back to a smaller device, would you mind sending me your Oneplus One? I REALLY REALLY REALLY want this phone. I’ll buy it from you :)

        • Peter

          I agree with you about CyanogenMod. I’ve used it on all my devices over the last few years. However, I disagree with you on virtually everything else … especially phone size. My current device is a Note 3 running CM11. It’s perfect for me, and my business. I’ve tried going back to a smaller device, but they are simply too small. What does all this say? Well, to each his own. Basically, there is no such thing as a perfect size, as there is no such thing as a perfect human. We all have our likes and dislikes. The size of a phone is a personal preference, and to mock the size of any phone is simply arrogance.

          • Luka Mlinar

            We made a tread on the OnePlus forum asking people which screen size they would prefer. I the huge majority was torn between 5.2″ and 4.7″. And to get some perspective on that; virtually no votes for 5.0″. Now if you did the same tread on the Chinese forum you would get everyone voting for the 5.5″ screen. You can’t satisfy every costumer but i can’t help not not notice whit what market this phone was made in mind.

      • Guest123

        My main point is, they have to hit all these out of the park constantly and consistently for the foreseeable future, miss on any of them and there’s a good chance they’ll become another “Notion Ink.”

        I hope they do very well, would love to see a more open handset and software OEM become a major player.

    • lacompacida

      Design, build quality, software (and software market place) must all be good, regardless of what marketing, sales, manufacturing, inventory and sourcing strategy you use.

      • Guest123

        TouchWiz on Samsung devices begs to differ, as does Apple’s generally undersized non-HD screens, etc. . . . enough of the right marketing will convince a large portion of people to buy junk.

        • Bryan Kwong

          Again exaggeration on how bad TouchWiz is. You make it sound like it’s absolutely unusable when it’s far from that.

          • http://facebook.com/icecowboy Maynard K

            You’re right. It’s very usable.. …to Samsung as a strategic long-term thrust against Google and other manufacturers. But very few of the technorati see any real value add, rather mostly cruft, bloat and complexification.

            Even granting that some of it works, some’s even cool and many in Samsung’s “ecosphere grasp” now only know how to get things done with Sammies and not “regular” Android…

  • Luka Mlinar

    Everyone jumped on the OPO train because of OPPO and CM. There are actually numerous tread on their forum devoted to answering that question. As far as marketing is concerned. Pete is piggybacking on OPPO’s tested model. So if anyone deserves credit for that than it’s OPPO.
    Now the thing about them using the forum to figure out what the users want. If any forum had an impact on making this phone than it’s the Chinese forum. If it was up to the EU and US users; this phone would never have 5.5 inches.
    This company over reached in just about every department. You can’t force change on existing business models. Firstly it’s not done, secondly it doesn’t work. Change needs to be done gradually. Messing with the distribution model was just pure stupidity from where i’m standing. Backlash from it is way bigger then i anticipated. One thing is when i see a user say that they don’t like the product, another is when i see people saying they hate the company.

    • http://www.AndroidAuthority.com/ Darcy Alexander LaCouvee

      So you don’t think they will succeed? Can you elaborate a bit further on why you think messing with the distribution model is a bad idea?

      • Luka Mlinar

        Because no one did it. It’s like playing in a champions league game with a 3-3-3-1 formation without testing it in the domestic league. It’s an incredible risky move in a totally unnecessary situation. The existing models are so basic and have been perfected endlessly. Anything that can go wrong with an existing distribution model has already happened.
        A phone being sold out in a matter of hours is a good thing. Imagine how far that news would reach. Isolating your costumers base to avoid it is pointless. Like scoring a own goal.

        • PacoBell

          Huh? They’re still going to sell out of stock in the initial batches, regardless of distribution model. They’re simply at the nascent stage of manufacturing and capital growth. Are you not familiar with how Xiaomi has been successfully doing business?

          • Luka Mlinar

            Xiaomi sold something like 100k red rice in an hour online. We are here talking about the invite system in particular.

          • PacoBell

            So what is substantially different between an invite system and a limited batched rollout? For all you know, they could also invite 100K people to buy their devices.

          • Luka Mlinar

            It’s different because not all costumers have the same access to an invitation.

          • Peter

            Yeah, so what? The problem here is not OnePlus. The problem lies with the arrogance of youth in North American culture. They’re a me, me, me generation. It’s highly prevalent in those under 20, moderately prevalent in those under 30, slightly prevalent in those under 40, and only very rarely prevalent otherwise.

            The “young-folk” always seem to think that whatever they want, they want it now, they want it exactly the way they think is best, they want it without lifting a finger, and they want everyone else to bend over backwards to fulfill their spoiled wishes.

            Well, too bad for you! The world doesn’t work that way.

            Many companies over the years have tried something new. Many have failed, and many have succeeded. In this day and age, if you don’t think “out-of-the-box,” you’re often doomed.

            I applaud OnePlus for trying something new. Yes, they may fail, but the may also succeed … and succeed tremendously.

            I couldn’t care less about their invitation idea. If I want their device, I’ll wait patiently for it. Yes, I said patiently. Sadly, the word “patience” seems to be lost nowadays. Too bad, and very sad.

          • Luka Mlinar

            Everyone keeps missing the point here. It’s not about when you get it it’s about who can get it. Equality of costumers. This system if not fair.

          • http://facebook.com/icecowboy Maynard K

            Charging $650 instead of $299 also excludes millions (or billions) of potential customers. Fairer??

          • Justin Merithew

            How is it less fair than a traditional pre order system? That caters to whoever can whip out their credit card fastest and run to to their computer, and those who are on the slower end may need to wait weeks or longer if their outside of what’s produced in the initial run, after paying full price. This system may not be perfect, but it’s really not much worse, if at all, than pre orders.

          • s class

            It’s a temporary system.

          • Eujeane®

            Sad enough while we are patiently waiting other devices with better specs would have come out and the oneplus would become obsolete

        • Carlos Paixao

          Excuse me Sir, but I don’t see they’re avoiding running out the stocks. The stocks will runs out anyway. They’re actually trying to do the oppose: not to miscalculate the storehouse, so that they sure enough they aren’t “stocking capital”.
          For this, they minded invitation, which has high pros and little counters. Maybe the greatest pro is that with this system they can have a good measure for the public interest, align with the first thought.

          • Luka Mlinar

            Try buying a phone and come back saying how it’s fair to you. In the meantime a bunch of kids with no jobs trading invites like it’s Pokemon cards.

          • Carlos Paixao

            When you are making your marketing plan there are several points you need to approach to build your strategy to get more chances to success. In order to reach your goal, distribution channels strategy is maybe the most important. There are several ways to distribute your product, depending on your target public, and It seems OnePlus chose an exclusive strategy to do so, by differentiation. This is marketing for bosses.
            So far, looks like the only kid we all can see nearby is you.

          • Luka Mlinar

            I see a bunch of big words of which non are referring to the topic at hand. This phone is gonna sell out one way or another. It would sell out even if they only sold it in China exclusively. In one corner shop, in a HonKong mall. Sales have nothing to do as to why this invitation system was a bad move. Pissing people off was the mistake. As far as me being the only one pissed.
            Here’s just one example of how the community reacted to it:
            https://plus.google.com/u/0/photos/+BrianHealy/albums/6003834810236717073/6003834816079845346?pid=6003834816079845346&oid=108155896912212356598
            It’s like having a club and only letting hot people in. You’re not being “a boss”. You’re being a dick.

          • Carlos Paixao

            People are pissed because they can’t buy what they want at they will. This is an expected coming from the market and only serves for helping measure how desirable the product is.

          • Luka Mlinar

            If the phone went on regular sale they still wouldn’t be able to buy it but no one would be pissed. And that’s the whole point.

          • Carlos Paixao

            They would likely be pissed for couldn’t purchasing because no stock anyway.

          • Luka Mlinar

            Yea but that rejection we expect. See that way everyone is equal.

      • Luka Mlinar

        Let me put it this way; it’s not because of the things i can foresee that can go wrong, it’s because of the things i can’t. That’s why i would never do it.

      • Luka Mlinar

        I estimate people will make a minimum of 2-10 million dollars of preorders on alixpress alone. Still think this model is ok? :P

    • McLovin

      Noone ever flew till the Write bros. did it, noone built home computers till apple did it, just because it hasn’t been done, doesn’t mean it’s gonna fail. Noone knows till someone tries.

      • Luka Mlinar

        I think it already blew up in their face.

  • adam

    What OnePlus needs to learn… How to actually ship a PRODUCT, kind of important no?

    • lacompacida

      It’s “How to actually ship a working, well made, well designed product, with lots of apps easily found and installed.” Next is after sales support.

      • banana wheel

        Yep, after sales support is also important.

  • paxmos

    Invitation my ass. Rather pay twice than going through this crap. I hate the fact that sites like this suck up to them and call their strategy smart. Thousands of brand evangelist doesnt cut it nowdays.

    • Besbes Souhaieb

      then just wait and you will have it for twice the price on ebay

      • paxmos

        Then I will pay 3X to get something else (anything) just not to have this phone.

        • CommentatusMaximus

          Then this isn’t targeted at you. There are plenty of big names with deep pockets calling for your attention.

  • Rachel

    “Success” is such a fluid term. If we mean that before yesterday only a very small handful of enthusiasts around the world had even heard of them, and today they were covered by every smartphone news feed around the globe, then yes, they’re a major success. Kudos! But from a manufacturer’s standpoint, success is selling a product, whether hardware or software, eventually at a profit, and at the moment they haven’t sold anything. They teased/cajoled/misdirected with sleight of hand their small band of followers, I being one of them, and will essentially duplicate Xiaomi selling model, small batches sold to small groups, over and over. While the price is incredible, one could make strong argument that an Oppo Find 7a, especially with its pre order gifts offers better value.

  • Shark Bait

    you mean be a start up,have few employees, move fast, bullshit and trash talk about competitors to build hype and not make any profit??
    yeah I really don’t see why the big guys don’t do this!

    • Theo Gregoire

      Could be wrong, but I’m absolutely certain that that’s exactly how Google launched Gmail ;-)

      • Shark Bait

        yeah totally, but its not like that any more, plus googles in the software game which changes everything. What I mean is not every phone maker can be like one plus because their small and new which has its advantages, but will all change….

  • wezi427

    Unfortunately I’m with the Evil Red Empire know as Verizon. If they made it so it would work on their network, I would buy one. Oh well.

    • Chris

      time to have TMO buy out your contract

      • wezi427

        Once they improve their coverage in my area I will. I hate Verizon.

  • Ishaan Malhotra

    Very impressive.

  • http://galaxynote3tips.blogspot.com/ Martens Nkem

    let’s wait for a year of at least 6 months before trying to force the lessons yet to be learned down the throats of other Android OEMs.

  • StraightEdgeNexus

    My take is that every oem should ditch their ugly skins and useless gimmicky features and just adopt cyanogenmod ROM. This is a good idea rather than the ‘differentiating user experiences’ which are good for none. Special mentions for sammy’s touchwiz, lg’s horriptmus UI, and sony’s what not UI. Sony UI for example dont have much functionality and looks have worsened, and their numerous buggy and late software updates are just sad.

    • mobilemann

      if just one major OEM did it, there would be enough of a cash infusion to really kick start cyanogen actually.

      • Pedro Guilherme Almeida Carval

        Guys dont forget that 90% of android users dont know what cyanogenmod is…
        I want to give you guys a good example of how the world is; I love android, i follow this website and others everyday about android, i use cyanogenmod, when I saw the Galaxy S5 and saw the specs i though, well nobody is going to buy this, is just an update from the S5 and today we have better phones than the S5, but guess what. S5 is selling like candys because most of the people dont care what specs the phone has but what the phone can do for you. That is why samsung LG and the others create their skins so that the users get used to the company software and update later to another phone from the same company. The biggest example is apple. If we look at the Iphone 5S specs and compare to S5 the difference is big but a normal person dont know that and maybe would buy the 5s.
        What I want to say is that One+ is creating a phone for geeks, people that love android and love to have the best thing possible…
        If they got this phone on stores do you think that a normal guy with no knownlage of phones would buy a phone from a company he never had heard before.
        Here is the difference, i really like this phone i would love to get my hands on it but i have no problem to wait a bit, maybe the others OEM release something even bigger!!!

        • StraightEdgeNexus

          cyanogenmod rocks though. a lot functional and beautiful than Touchwiz. I am getting twice more battery life with CM 11 and the performance literally flies.

        • Skogsnallen

          That’s why 1+ are using this business strategy – they want to be recognized as a brand so that other people that aren’t as geeky as us also will buy it, because they’ve heard of 1+ before.
          I totally agree with what you say though, WE ARE NOT NORMAL USERS. I’m not the most geeky person, I don’t even know how the processor works, but I know more than the average Joe customer.

  • diper07

    One Plus may or may not be Flagship killer but it is definitely a Nexus killer. It has better specs (especially camera) at such a lower price.
    Cyanogenmod is also a big plus. It is fully AOSP + with awesome customization features and little performance tweaks!

    This phone is going to rock unless Nexus comes up with a cheaper phone.

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  • wikwakcow

    yeah… there must be an effort to get that specs for such a relatively low price….

  • jay

    Well that’s what I always say price sells phones! Nothing else and when you get a lot for your money people are buying it!

    • K2

      Price sells phones? Then why is iphone so successful you i****t.

      • jay

        Because they can and people buying Android only has a bigger market because they have cheap phones and in the biggest growing market in China will only cheap sale

  • John Motschenbacher

    The funny thing is the hype….is mainly in the small dev corner of the consumer world. Most people have never heard of One Plus.