Marketing idea for OnePlus: How about just selling the phone?
This article may contain personal views and opinion from the author.
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?