OnePlus trying to match demand with supply

OnePlus trying to match demand with supply
OnePlus has been knocked for using an invitation system to sell its flagship-quality phone. But those wondering why the manufacturer made it so difficult to obtain a OnePlus One, are probably not taking into consideration the economics of competing in this business. Company founder Carl Pei explains that with margins as thin as they are, the trick is to make sure that there isn't too much inventory left when sales come to a halt.

Sales of the OnePlus One have been far greater than Pei envisioned that they would be. At the beginning, the goal was to ship 30,000 units. Pei said that 50,000 would have been good, and shipping 100,000 would have been great. At this point, OnePlus has shipped over half a million phones, and is aiming to hit the magical one million mark before the end of the year. Since OnePlus sells directly to consumers, the number of phones shipped is the number of phones sold.

Pei mentioned that OnePlus can't quickly change the size of its orders to certain vendors. He says that his screen supplier needs 90-day advance notice for any changes to the original contract. That limits the ability of the company to match current demand with supply. OnePlus' business model is somewhat similar to what BlackBerry is doing with its enterprise focused BlackBerry Passport. Instead of producing as many Passports as possible, BlackBerry has limited the number of phones tumbling off the assembly line to avoid a repeat of what happened with the BlackBerry Z10. Poor sales of that model forced BlackBerry to write off $2.7 billion in 2013.


OnePlus is scrambling to take advantage of what has been pretty strong demand for the One. Considering that the company relies on social media and word of mouth, we would have to say that it has done a pretty good job of creating demand for the handset. Now, it is a matter of working on supplies of the phone.

source: PCMag

Related phones

One
  • Display 5.5" 1080 x 1920 pixels
  • Camera 13 MP / 5 MP front
  • Processor Qualcomm Snapdragon 801, Quad-core, 2500 MHz
  • Storage 64 GB
  • Battery 3100 mAh

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12 Comments

1. Limbopope

Posts: 62; Member since: Aug 12, 2014

As long as I get my RMA next week I don't care what they do XD

7. dome888

Posts: 86; Member since: Oct 10, 2012

cross your fingers hard.

2. gaara6775

Posts: 738; Member since: May 20, 2014

When there is less demand they can meet the supply.

3. PK1983

Posts: 215; Member since: Aug 08, 2012

2 weeks until mine arrives.

4. xq10xa

Posts: 803; Member since: Dec 07, 2010

Just ship mine already! I would have purchased a Nexus 6. But I don't have an upgrade and spending $750 for a phone seems pretty stupid. Not matter how well off you are. I purchased an HTC One for $700...and that phone just sits there now.

14. deewinc

Posts: 454; Member since: Feb 21, 2013

The difference between $750 and $700 is very marginal. It is pretty much stupid too to spend $700 on a phone. So stop being ironical.

18. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

Smart, especially for a phone that's going to end up in a landfill in a couple years.

9. downphoenix

Posts: 3165; Member since: Jun 19, 2010

If they would have just had a standard preorder system rather than the stupid queues and invites the whole time, they probably could have sold a lot more, since they would have been able to see real demand, in $, instead of forum posts.

11. dimas

Posts: 3249; Member since: Jul 22, 2014

I want to think that One Plus didn't expect people to like their product. Their marketing predicted low sales that's why they opt in producing in lesser volumes. If they can put sd slot and organize their marketing strategy, it will have appeal to people even if they only sell it online.

13. ryanmononoke

Posts: 21; Member since: Nov 05, 2014

Regardless of the complaints here, if we are in the shoes of the start up 1) Having first new product for the new company 2) Not having free cash flow as humongous as that of Apple's 3) Relying on Oppo manufacturing facilities which may impact Oppo's own production in a negative way The invite system is, arguably, still the best way to eliminate unnecessary inventory holding.

17. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

"The invite system is, arguably, still the best way to eliminate unnecessary inventory holding by thoroughly alienating millions of potential customers". FTFY.

19. Fazz1977

Posts: 153; Member since: Oct 15, 2014

Had one, got rid of it for something with a real OS. CM11 is a bucket of anuses.

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