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What every phone maker could learn from OnePlus

Despite being just 5 months old, OnePlus sure managed to grab a lot of attention with its OnePlus One debut. With that in mind, we take a look at what made the OnePlus' launch so successful and what other phone makers could learn from the company.
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.

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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.”

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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.

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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.