A year and a half ago, OnePlus may as well have not existed. It had no products under its name, no brand recognition, and certainly no mindshare. Then it announced the OnePlus One, a low-cost, unlocked smartphone that promised to rival the best flagship phones from known brands. It was launched with a raft of unconventional (and often criticized) marketing campaigns to build buzz. Those efforts were undeniably effective: OnePlus quickly went from non-existent to the talk of smartphone enthusiasts the world over. Waitlists to purchase the phone stretched from weeks into months, and it took the better part of a year for OnePlus to catch up with the ravenous demand.
Last week, OnePlus revealed its follow-up, the OnePlus 2. It’s also a powerful Android phone that costs far less than flagship smartphones from Apple, Samsung, HTC, and others. The OnePlus 2 is being launched with a similar invite-based system as the OnePlus One, and is being sold direct to consumers, bypassing standard retail channels and carriers all together. By all accounts, the OnePlus 2 is a much improved device over the One, with a better display, better design, better camera, better build quality, and new features such as a fingerprint sensor and a USB Type-C port. It’s going to be available for purchase (to those who have secured invites) starting on August 11th for $329 or $389 depending on configuration, a price that’s just as aggressive as the One.
But this time around, OnePlus says things are going to be different. Co-founder Carl Pei says that the company has “30 to 50 times more stock available for launch.” He says that only 1,000 units of the first model were available when it was announced, which made it hard to initially satisfy demand for the device. He also tells me that the company has learned a lot in the 458 days between the phones, including making it easier for interested buyers to secure invites without having to participate in contests or “jump through hoops” to get them (though, without out a doubt, there will be contests and other means to get invites aside from just signing up for the OnePlus 2’s waitlist, which now numbers well over a million).
Pei has been on a whirlwind of promotion across the world over the past two weeks. Aside from meeting with press, he’s been shaking hands and taking selfies with diehard OnePlus fans that recognize him almost everywhere he goes. Over the weekend he was mobbed by thousands of fans trying to get a glimpse at the new phone at OnePlus’ pop-up tent in Times Square (similar pop-up experiences were put on in cities across the world, including London, Paris, Jakarta, New Delhi, and San Francisco).
But despite the hysteria, Pei is eager to express his pleasure with how he believes the unique, VR-based launch went (OnePlus says 40,000 people tuned in to watch it live, and views of the video number well over 100,000 now). He’s also very well rehearsed: his answers to my questions are on-message and belie a confidence that a skeptic might say veers into something stronger than confidence. Pei can’t help but sprinkle references to Apple when I ask him about the OnePlus Two. "Apple doesn’t have all the features in all of their phones," he says about the decision to leave out common Android standards such as NFC or quick charging. Pei also believes that his company is more product-focused than any other Android maker. "We were all using iPhones [when the company first launched], and that's why we decided to start this company, because no one with an Android cares about product as much." OnePlus, the implication is clear, does. That kind of comparison takes a certain level of bravado.
Throughout our conversation, Pei keeps returning to how important the product and experience is to the company’s overall success, echoing the mission Steve Jobs set forth for Apple so many years ago. Pei is careful to note that OnePlus doesn’t aim to be a low-cost phone maker. "I think there's some misunderstanding about OnePlus in the market, some people say, hey, 'it's high spec, low price,'" he says. "That's never been the goal. The goal has been to just think about the best user experience and make it happen." But it’s hard to ignore the fact that the low cost of its phones is what has attracted so many people to them in the first place.
Pei points to things such as the new ringer switch on the OnePlus 2 as a feature that will separate his product from an increasingly crowded market of unlocked phones with high specs and low cost, which now includes well-known brands such as Motorola. "If you just compare our phone to another [Android] phone on its spec sheet, you're not even going to see the [ringer switch]," he notes. "It's something that for everyone we've shown it to, they really like it, they're always asking, ‘Hey, why didn't someone else do this before?’" (Among the non-Android companies that have done it before: Palm and Apple.) But while Pei claims that OnePlus isn’t focused just on putting a lot of high-end specs in a phone and calling it a day, he admits that "what they care about are the specs, I guess," when referring to OnePlus’ current fan base of early adopters and technophiles.
And right now, early adopters and smartphone aficionados are really the limit of OnePlus’ customer base. Though the company has been able to build tremendous amounts of hype and attention through its fan forums, social media accounts, and on technology blogs, the reality is that OnePlus is far from a household name at this point. Selling 1.5 million phones, as OnePlus did for its first phone, is certainly impressive for an upstart company, but it pales in comparison to the number of units Apple and Samsung move each quarter.
For all of the changes OnePlus has made for this launch, one thing remains the same: its marketing approach is going to be unorthodox and constantly changing. Pei says there will never be a time when OnePlus will throw gobs of money at traditional advertising. He plans to reach a wider audience by iterating on the marketing ideas that have been successful so far. "For instance, the Times Square [pop-up], it’s our first large-scale offline event, and Times Square is kind of significant, not only in the US, but in the world as well," he says. "We'll never go all out, like buy billboards and buy a bunch of ads because the return on investment is really really low, and that'll force us to actually raise the prices on our phones." Pei hints that the company has more tricks up its sleeve for getting its brand out there in the near future, but we’ll have to wait until later in the year for those. Chances are, they won’t reflect the short-lived "Ladies First" campaign that attempted to garner more interest in the brand from women, but came off insulting and misogynistic. The "execution and contest rules messed things up," says Pei, and he would have done that campaign differently given another chance at it.
"We'll never buy billboards and a bunch of ads because the return on investment is really low, and that'll force us to raise the prices on our phones."
OnePlus is also exploring other channels to sell its phones, aside from direct-to-consumer e-commerce. "Later this year, we'll be setting up a team in Europe to explore just that, and because of our unique model and how we keep very low margins, it's going to be a challenge," he says. "The retailer is going to want their cut, the carrier is going to want their cut, so in the end we'd have to find something more strategic, and that experiment is going to start in Europe."
For the US, Pei is content with keeping an e-commerce model. He’s betting that direct-to-consumer sales become the main way people purchase new smartphones — a model now being followed by Motorola, ZTE, Alcatel OneTouch, and Huawei. "The key to success will be the product," he claims, "marketing will be less important, the channel strategy will be less important, and I think that's super good for us because we're very confident in our products."
That confidence is likely to continue and grow as time goes on and OnePlus is able to get the OnePlus 2 into people’s hands. "I don't just want to brag about it," concludes Pei. Note the "just" there. In the context of the wild amount of hype he’s managed to build around his company, it’s hard to blame him for bragging — even if some of the methods used to build that hype can grate. In the end, though, the product needs to justify the hype, and of course Pei believes it will: "I just really really want people to use the phone and make up their own opinion."