Marketing idea for OnePlus: How about just selling the phone?
There are multiple ways to pursue such a goal, of which, the most common method nowadays seems to be through crowdfunding. Given the success of the Pebble smartwatch, it looks like it is the easiest to organize, but similar outcomes are never as certain.
For a while, there was even a period where the Pebble had not yet completed shipping to its founding funders and the company had scored a deal to begin selling through Best Buy. Growing pains aside, the Pebble arguably sits atop the smartwatch niche, and given its roots, it is hard not to cheer them on. Pebble had a good idea, and did not mess with the formula during its crowdfunding campaign.
Then, there was Canonical and the idea for a massive $32 million crowdfunding campaign for the Ubuntu Edge smartphone. It was going to be the top of the line in everything, and also deliver a seamless experience between mobile and desktop environments. I liked the idea and I was one of the too-few that pledged money to see the Edge come to fruition. The campaign failed miserably, and not because it was a bad idea, but because Canonical kept messing with a good idea and refused to leverage any of its own business muscle into the mix.
As I examine the situation, I want to point out that I have not signed up to receive an invitation to buy the OnePlus One, so no, this is not a rant about "why won't they invite me?!"
If you build it, they will come
In-demand items almost always sell-out. It has happened with the iPhone more or less every year. The Pebble couldn’t keep up for months. Google’s Nexus line ran into higher-than-expected demand as well, catching LG by surprise, particularly for the Nexus 4.
So when the idea of creating an affordable, high-spec, flagship killer came along, and OnePlus set out on that mission, did anyone have any doubts about whether they could pull it off? Using established, high-end but common hardware, made in China, to be sold at cost, plus marketing and hype to generate a huge amount of excitement and pent-up demand, the OnePlus One was set-up for success. The association with Oppo (whether official or just a relationship) only added to the excitement because it generated high confidence that the OnePlus One would be a well-built product.
The fact that there wasn’t a crowdfunding campaign made it all the better because it set the expectation that the OnePlus One would be built.
That “great” idea
I don’t need to point out what OnePlus’ GFI was, but I’ll spell it out anyway: Sending invitations to “buy” a smartphone is the dumbest, stupidest, “great” idea…ever. It may have had a place for its initial release, first invitations get the first manufacturer runs. I get it, it keeps the hype going and protects OnePlus from over-investing in making too many devices while production and quality issues are identified and fixed.
“Invitations” started going out months ago, and the device is slowly making the rounds. I saw a few at Google I/O and the impressions from the respective owners at the time were solidly positive. Our own review of the near-mythical device was also glowing. I know there have been grumblings about certain things, but let's by honest, by any measure, the OnePlus One is a successful first build of hardware and that is an accomplishment in itself, congratulations are due to OnePlus.
Scarcity tactics should be finite
The thing is that these invitations really have nothing to do with any “real” scarcity of the device. There are online retailers that will sell you a brand new OnePlus One device. Yes, the price is marked up from retail that OnePlus has listed on its own website, but that is because these retailers are not selling it at cost like OnePlus proclaims.
The doling out of “invites” to buy the OnePlus One have been going on long enough now that the team in China should know what a sustainable production schedule should be. If the OnePlus One is to be a true “flagship killer,” affording no compromises, then limiting distribution to invitation only is going to fail in the long term. Why would I, or any consumer, wait months for an invitation to buy, only to wait longer for the device after I order it? I know there is a cost factor involved, but ask yourself how you value your time and patience.
Scarcity tactics in technology need to be limited in scope and in time. The cycle of excitement for new smartphones really only lasts a few weeks if competitors don’t steal the thunder. By the end of the year, there is going to be more new hardware, with new features, coupled with monstrous marketing budgets. The hype of these new products are going to eclipse the momentum that OnePlus has generated thus far. The company has the compelling argument for people to spend their $300-$350 now. By the holidays, the cost factor will be moot, and it’s all going to be about the new iPhone, maybe a cool new Windows Phone, and let us never forget the gorilla in the room, that is, Samsung.
The obvious problems with the invitation system are now outweighing the benefits. It was implemented to control the influx of customer orders while controlling production and getting through initial growing pains. That makes perfect sense, but those that set up accounts to receive invitations had no controls. People that live in a country that were not identified as part of the launch (17 countries) were still placed in the invite queue, and either cannot buy the OnePlus One when invited, or they have to set up a mail-forwarding service to get it. That is probably not a big deal to the user that really wants it, but if he or she chooses to not buy the device, it skews the demand curve for OnePlus.
I don't have an issue with the last “contest” (since canceled) for invitation giveaways that were going to be “just for women.” I don’t even need to pick a side in that GFI. I look at it from the standpoint that there are all these people waiting for invitations to buy a product. The invitations being distributed are not following any linear process that I’ve seen. In fact, I am not even sure what it takes anymore to earn an invitation (something to do with signing up, then having a minimum-undisclosed number of posts in OnePlus' forums). Plus, the company is also setting up contests to give invitations away to people that maybe did not have to wait in line in the first place. Wouldn't it be easier to simply take people's money? It's as if all this effort was made to be so different from everyone else and it has contorted itself into...well I don't even know how to describe it.
Pump up the production to “11”
OnePlus is saying that demand “is many times” initial estimates. I understand it takes time to ramp up production and ensure you have the supply chain in place to build the final product. That said, this is a single product. The only differences are in storage capacity, and the color of the back plate. I’m not saying that all that this is as easy as snapping on an extra chip here, and some injection molding there, but it arguably is that simple. If there is one thing the Chinese have proven themselves to be pretty efficient at, its serving as a manufacturing base.
OnePlus has also said that the demand is something that no one on the team has ever seen before, despite claims that many come from working for other “leading consumer electronics companies.” I would like to know who those “leading” companies were then because all the leading players that come to my mind have had to endure demands for a product that outstripped supply at some point. In OnePlus’ case, demand for the “privilege” to buy the OnePlus One is apparently outstripping the ability to just offer that option. That is a high-class problem.
Overproducing and risking having too much unsold inventory can be a killer for small upstart companies, especially when it involves hardware that takes up physical space. In OnePlus’ case though it has the benefit of being based in China, and the manufacturing is being done under some type of contract. Moreover, the low cost of the devices means that the risk of being stuck with an oversupply is going to be very low. Production needs to be kicked into high gear, quickly (as in cranking by September).
Time is money
Being a “flagship killer” means being out there actually killing flagships, and getting the product in the hands of people. The marketing hype has run its course. The next big announcement needs to be in the form of getting invites to the early supporters en masse, followed by a traditional e-commerce order platform that will allow people to order or backorder, and have the ability to get the device shipped to more than just the initial 17 "launch" countries. Declare the additional countries as "alpha" markets or something so you don't have to rush support.
Even for the money, the competition is still pretty compelling, the Google Nexus 5 an outstanding value, the new LG G3 is excellent, the Samsung Galaxy S5 is, well, the S5, and the HTC One (M8) is a work of art. The Nexus 5 is already a bargain, and secondary retailers have the other aforementioned devices available for well under normal retail. The OnePlus One is competing in a field with an impressive cast of characters.
Where the OnePlus One has made the biggest ripple is with the cost of the device. It can still undercut all those other smartphones in price (even if they’re discounted). Is that enough of a value proposition to be the “killer” the OnePlus One is meant to be? You could maybe get flagship specs at a subsidized price, if you get an invitation to buy one. All you have to do is sign-up and wait for the invitation (and participate in the forums). Once you get the invitation and assuming you don’t let it expire, you can order it, if you’re in the right country. Then, wait some more? Yeah...no. Never settle, right?
1. Topcat488 (Posts: 1173; Member since: 29 Sep 2012)
Excellent article Maxwell R.... +1 green thumb from me.
I'm still spending my money on the Note 4 AND iPhone 6 though. O.o
19. tadaa (Posts: 257; Member since: 18 Apr 2013)
remember when there used to be red thumbs here in PA?
pepperidge farm remembers
41. techperson211 (Posts: 710; Member since: 27 Feb 2014)
They're selling color OS in ASIA for about $500 for 64 gb, What a waste of money for this company even if you bought the international version there's no after sales service , might as well buy to established phone makers.
40. 0xFFFF (Posts: 3729; Member since: 16 Apr 2014)
+1 for the good article.
Though, IMO it is still far too kind when it comes to the clowns that run OnePlus and their deceptive antics.
At the end of the day, I'd rather pay a little more and get a real phone from a real company than offers real support. And available to buy when I want to buy.
43. downphoenix (Posts: 2415; Member since: 19 Jun 2010)
OnePlus should just do a first come first serve thing, maybe do like Xiaomi where they put up batches of phones, first to go in and successfully complete the order get it, others gotta wait. maybe limit 2 phones an order, and cant order for 2 more order timeframes, to ensure everybody gets a chance at buying them even if availability is limited.
2. dickwyn (Posts: 601; Member since: 07 May 2012)
yeah i agree form the start they're just trying to get the market's attention. When the phone gets to the hands of the masses then it's time to launch another flagship model
3. damokles (unregistered)
The day it hits the shelves, it is already an old device, so nobody will give a F. So, let's wait for the better phones to be released.
6. Maxwell.R (Posts: 175; Member since: 20 Sep 2012)
I would hate to think of the purchase scheme that is brewing for that. Might involve digging for golden tickets or something.
10. JC557 (Posts: 1163; Member since: 07 Dec 2011)
You get nothing! You lose! Good day sir!
I said good day!
5. nebsif (Posts: 37; Member since: 27 Jul 2014)
The money u think u're saving when U buy it with an invite U actually gave 1+ by working for their PR department participating in stupid invite contests.
With them bezels, no mSD and built in battery (while being bigger than 5.7 note3) it doesnt deserve half the hype it got.
7. GreekGeek (Posts: 845; Member since: 22 Mar 2014)
I still don't get why this stupid company gets media mileage.
The only thing that they're good at is annoying consumers
28. cyborg009 (Posts: 93; Member since: 17 Sep 2011)
Good one :D
No matter all crab they say about OPO, if you put an invite link right here all hell will break lose :P
8. realjjj (Posts: 165; Member since: 28 Jan 2014)
What makes you think that they ever intended to make significant volumes for sale outside China where the price is just normal?
Have you seen any shortages in China? Ofc not because there they can't build the brand by not selling a cheap phone, all local phones are cheap.
At least they win the "vaporware of the year award". (Google Glass gets the "vaporware of the decade" award since they don't seem likely to launch it before 2025.).
12. brokenchains (Posts: 17; Member since: 28 Nov 2012)
Glass has always been an experiment. I wouldn't call it vaporware because they never really had the intention of a widespread release.
We do need a term for hardware that never materializes. I vote for vaportech.
15. Maxwell.R (Posts: 175; Member since: 20 Sep 2012)
Mainland China OS not one of the launch markets. From the get-go, this has been touted as a "flagship killer." It's not vaporware. The invite system is just a terrible idea.
29. VZWuser76 (Posts: 1886; Member since: 04 Mar 2010)
How is something vaporware if it actually exists? When they talk about vaporware, there isn't a proof that it actually exists, only rumors and supposition. Glass has been seen in the wild, there have even been court cases about where it can be used and IIRC laws written about where/when they can be used. Vaporware is the wrong word.
9. frydaexiii (Posts: 1239; Member since: 01 Dec 2011)
Exactly what's been on my mind about oneplus all this time...
Seriously, if you claim to have the best phone, start a fair sale system like pre-orders, not make the Hunger Games with the invite system.
Might as well settle...
11. LikeMyself (Posts: 302; Member since: 23 Sep 2013)
This phone is a fail! Popular makers have a huge price for flagships as these cover the big costs of processors from Qualcomm, infinite patents to pay, and price for ads! Takes a lot of resources to make a good phone which the OnePlus can't do and will remain a virtual great phone on paper!
13. cocote177 (Posts: 16; Member since: 12 Apr 2012)
I want to buy one of these phones, but it is virtually impossible to find them, so I decide to wait for the next Nexus iteration. It would be available in the coming months....
14. JC557 (Posts: 1163; Member since: 07 Dec 2011)
Well, at least there are 64GB models for sale on craigslist at a reasonable price and invites at a not so reasonable. This was for NYC though.
Other than that OnePlus should really rethink their strategy, especially now that the sequel is in the planning stages if not in the works already.
16. GreekGeek (Posts: 845; Member since: 22 Mar 2014)
I hope they will vanish into bankruptcy as soon as possible.
They had enough media attention, And it looks like they have no intention of selling these units in actual volumes.
THAT is trolling to the highest degree folks.
17. AfterShock (Posts: 2960; Member since: 02 Nov 2012)
It was a big deal in the early spring.
Now, it's who cares.
20. InspectorGadget80 (Posts: 6732; Member since: 26 Mar 2011)
OnePlus will just closed it's doors
21. FoneAddict (Posts: 209; Member since: 05 Jul 2011)
Lost interest in this phone. By the time it's widely available newer phones will have already superseded it.
23. billgates (banned) (Posts: 555; Member since: 29 May 2014)
I'm typing on mine right now. Great phone and got lte working properly so that's a plus
24. dimas (Posts: 352; Member since: 22 Jul 2014)
Wait, you mean One Plus is still alive? It's already months, new phones are coming, they're going to die out of obsolescence.
25. zinger69 (Posts: 48; Member since: 13 Feb 2014)
If One Plus brought in someone who actually had a background in supply chain and running a business in general they would probably be in a better position to offer the phone to the masses.
Instead they decide to create this bizarre invite system and promote dumb contests. It's a shame really because they seem to make a nice product.
26. a_merryman (Posts: 718; Member since: 14 Dec 2011)
Meh, I spent literally a couple hours trying to get an invite and bought the device the same day. It isn't that hard to get your hand on invites.
Phone is amazing btw.
27. gnotch (Posts: 19; Member since: 31 Dec 2013)
the invite system is a freaking horrible idea. Until you get the invite. i got an invite and was so happy yet so upset, because i didn't have any money to buy it atm. since the claim only last for 24 hours, i was so upset. i was gonna give up my iphone for this phone. but oh well.....
be on your toes people, if you signed up for this phone you better be prepared when you get an invite.
30. VZWuser76 (Posts: 1886; Member since: 04 Mar 2010)
That just seems ridiculous. First, wait, wait, wait for an invite, then when you get the invite, buy it RIGHT NOW!! All these hoops to jump through to give THEM money, F that.
31. gnotch (Posts: 19; Member since: 31 Dec 2013)
from ppl who have the device, it seems like the wait doesn't match the outcome, ppl love the phone, i just wonder how many ppl bought it from somewhere else instead the OnePlus one site ~ i was thinking about doing that instead..
35. bigcjm (Posts: 15; Member since: 27 Jul 2014)
This Company never promised you folks anything other than if you get an invite youll get the phone. Never said they'd ahve a few million ready to sell. They've said they'd have more but since no one including this writer has any idea how many people have the phone.
Then you have people saying put together a pre-order system. Okay so it took 4 months for me to get mine and that wait was rough. Now you want to give them the money, plus wait with no eta on the phone. Imagine how much complaining youd do with them having 300 plus dollars of your cash. Count me out. Invite system isnt new folks. There's products mostly in the luxury market that are invite only. Get over it.
By the way most early supporters already got the phone. Hell i joined up back in april and recently got it.
36. Limbopope (Posts: 25; Member since: 12 Aug 2014)
Joined forums four weeks ago...spent 8 days trawling for an invite...now own the OnePlus One. By being on the forums you can really see how the invite system polarizes people. This article comes from the very butt hurt side that can't get the invite. The other side that I'm now on is probably artificially elated with the device in part due to the scarcity of the devices combined with it's genuine great performance and cost. Both sides are slightly irrational. I am irrational writing this, this article is also irrational but longer :-P. All caused by the invite system. At the very least...the invite system was a very interesting experiment.
38. Maxwell.R (Posts: 175; Member since: 20 Sep 2012)
You made my point and I'm not even trying to get an invitation. OnePlus made it clear why the invite system is in place, to control the flow of customer orders. However, the hype and marketing is creating an artificial scarcity. In the end, the OnePlus One will not be a "flagship killer" because impatient consumers are not going to wait on a train that may never come when they can get a Nexus 5 32GB for $50 more, or grab from a ready supply of flagships for anywhere between $50-$600 depending on conditions. The mystique is gone, and if they haven't figured out production plans by now, invitations won't be worth anything.
49. bigcjm (Posts: 15; Member since: 27 Jul 2014)
Its really no big deal in the end. Just because people are impatient doesnt mean the company is wrong. Aslong as they are staying afloat finiancally nothing else truly matters. Simply if the next phone is widely available no one will care. Its a good product even if they charged another 100-150 bucks for it. Id rather have a good product thats scarce like the one plus than a poor product thats easily avialble like the fire phone. Not having enough isnt a huge issue and like i mentioned we have no idea how many have been sold. This is being sold internationally.
37. p51d007 (Posts: 84; Member since: 24 Nov 2013)
You need to understand the mindset of some of the Chinese manufacturers. I'm not saying its right, but it is how it is. In "the west" where Capitalism/open markets, so to speak, run supreme, when a manufacturer wants to sell a product, they gear up, produce a volume of a device, ship it to warehouses, distributors, retailers and they hope their inventory sells out before people lose interest, or a newer whiz-bang device shows up from the competition.
In China, at least from the wireless phone makers, such as OnePlus, Oppo, Huawei, ZTE, Xiamoi and the like, they do it differently, for the most part. You've seen the articles where Xiamoi "sold out" in 5 seconds on one of their devices, and it was found that it was what, 5000, 10,000? That does one thing, creates more hype. But, how it works on some manufacturers over there, is they don't build up an inventory. They build a batch, offer it for sale, then take that money, buy more products, build another batch, offer it for sale and on and on. Sounds screwy, but, it keeps capital costs low, hoping that by volume, the price per item comes down over time, and it keeps excess inventory LOW, so they don't have a lot of left over inventory, after a device gets passed by another device from a competitor. In some ways, it's smart business...keeping demand high, inventory low, plus not tying up a lot of capital resources, if you don't know what the demand will end up being. Now, in the case of OnePlus, they SHOULD have seen the writing on the wall, with so many signing up on their website, that the demand for a high end device at such an attractive price, NON CONTRACT. With no manufacturing capability of their own, Oppo produces the device, which explains why the Find7 & OnePlus look like twins. Oppo also wants to sell their device, the Fin7/7a, which sell for a much higher price, than the "giveaway" price for the OnePlus. I don't know what the production capability of Oppo is, but, you can bet 100% of devices produce, do not pass inspection (might explain how the IPS failed displayed got shipped anyway, to boost output). One Plus, "said" they could produce 30,000 units per day I believe, and at that rate, even if the output were 100% after filling the DOMESTIC sales first, it would take considerable time, to fill the backlog. Now, had OnePlus, built up inventory, after announcing this in April, people by THIS time, would have given up, because the "next big thing" will be announced in August, September and then of course you have the iPhone coming. OnePlus would be sitting on excess inventory. I don't know what the answer is, but OnePlus needs to hire a marketing agency, if they ever hope of having a OnePlus Two device.
42. Maxwell.R (Posts: 175; Member since: 20 Sep 2012)
Assuming you're correct about possible production capacity, allowing for just 15 working days per month, or assuming a 25% quality failure rate at 600,000 units per month, OnePlus has the ability to ship 450,000 units per month. There is no way the demand is that strong.
Oppo made its bed, if if OnePlus is selling at cost, then that cost include whatever Oppo recoups in the effort. Companies compete with themselves all the time. Oppo is Asia centric, the OnePlus One has the majority of its launch markets in Europe plus the US and Canada.
There are easily a dozen more effective ways to get this phone out of the gate and in the hands of customers, and none of them involve the contortions of the games people are being asked to play. The marketing has become a joke.
46. 0xFFFF (Posts: 3729; Member since: 16 Apr 2014)
I might add that taking in pre-order money would also give OnePlus some flexibility when it comes to the manufacturing. So even with the "batch" mode to manufacturing, OnePlus would be in a position to make far more phones than they are making now.
Of course, this is predicated on the assumption that OnePlus actually wants to make and ship phones. I no longer believe this is actually true. There have been many opportunities for OnePlus to make more phones and they haven't done so.
Also, as you well know, running a "contest" which involves collecting sexy pics of women doesn't manufacture or ship phones. This sort of thing only establishes a company as "creepy".
39. SemiFinal (Posts: 57; Member since: 26 Jul 2014)
Simple rule of economics: increase price increase production, lower price more production. This is also a new company and are selling the device at cost.
The company may want to sell more but maybe it just can't.
44. netsmart (Posts: 1; Member since: 13 Aug 2014)
I have the OnePlus One for two Weeks now, and it's a good phone so far. The problem i have with this company is the excuses for everything! For example, my phone was delivered from the US and I still had to pay almost 100$ for delivery and duty tax.
The anwser from Oneplus, they are working on the problem for the futur customers. However they cannot do anything for me. Extra charge like this, that changes the price of a phone.
45. halofan1996 (Posts: 5; Member since: 26 Sep 2013)
I got an invite once but i couldn't use it because they wouldn't ship it to Australia ._.
47. waltiii314 (Posts: 1; Member since: 14 Aug 2014)
I was excited when I heard about this phone, joined the forums, joined contest for the phone....NOTHING, said f-it and totally forgot about it while I waited on the next big cheap phone, was going to buy a xiaomi mi4 when it became available in the US in the next month or two...then BAM...invite for the OPO went to my junk mail. I just found it in time before my 24 hrs were up...decided to go ahead and bite...phone was delivered within 5 days to the US. Can't wait to get home to try it out. Moral of the story....patience is a virtue:)
48. Webmutation (Posts: 6; Member since: 14 Aug 2014)
I followed this company and got an invite weeks ago. I WILL never BUY anything from this company I don't like the way they do business, I don't like their smash campaigns and I don't trust them. Plus they are liars, the phone is HUGE for that alone I would not buy it, but the invite system makes no sense... if you want to know demand then let people pre-buy it, much simpler no?!
Anyway I am very glad I did not buy this phone I am very happy with my MI3W 64Gb