OnePlus will launch in 2015 a second smartphone, called the OnePlus 2. This is expected to have a smaller screen than the 5.5-inch display of the OnePlus 1. Will OnePlus be able to survive with its exclusive sales model? Or is it trying to develop into a mainstream manufacturer? Both routes could lead to success.
OnePlus is doing an admirable job in its efforts to penetrate a market dominated by big manufacturers. There have been numerous victims already to the duopoly of iOS (Apple) and Android (mainly Samsung). One can be skeptical, but OnePlus appears to have done nearly everything right so far. The OnePlus 1 smartphone upsets the standard market division of high-end, mid-range and low-end handsets, offering a high-end device for a price more often seen in the mid-range market. The second version of the OnePlus 1 costs as little as EUR 270 for 16 GB storage and only EUR 300 for 64 GB. The price-quality ratio is extremely favourable.
The company is also strong on marketing. At the phone's initial launch in April, it was available by invitation only. Anyone who acquired one of the devices could also invite someone else to enjoy the pleasure. This created a certain hype around the brand, which other smaller players such as Xiaomi, Wiko and Jolla have tried to generate. At the end of October, OnePlus will open a short window for online orders of the phone. Both of the sales methods are aimed at keeping inventories low, allowing the company greater financial flexibility to offer competitive prices.
Nothing's certain yet, especially with a new phone on the way, but OnePlus is doing a number of things well enough to make it a serious challenger to the handset market leaders: a good price-quality balance, clever marketing and tight inventories. With the handset soon to be available freely, it will lose some of its exclusive character, pushing the company into a new phase. This raises the question whether the company will aim for increased scale. This could make it a victim of its own success, leaving little in the way of differentiating assets. If it instead decides to survive as a small player, OnePlus has created an interesting niche for itself.
