How OnePlus Managed To Disrupt The Smartphone Industry
In this digital age, where information is being exchanged at the tap of a screen or the click of a button, the need for owning a smartphone is huge. The fact that smartphones are getting cheaper, smarter and readily available makes it easy for any individual to own one.
The smartphone revolution began when Apple, under the leadership of Steve Jobs, released its first iPhone and Google developed its own open operating system (OS,) which came shipped on LG, Samsung and Sony devices. The battle for the position of best smartphone was kickstarted with people choosing either Apple or Android devices.
While Apple and Samsung are the market leaders of providing premium flagships which have the best features in terms of software and hardware, a small unknown Chinese company called OnePlus soon entered the scene. OnePlus had everything to gain with their unique marketing strategies and their unbelievable pricing without compromising on the quality of both hardware and software. Eventually, they ended up disrupting the entire smartphone industry, earning them the moniker of ‘Flagship Killer.’
Marketing strategy
OnePlus started out with the intention of providing an Android smartphone which looked and felt premium in every way. When OnePlus was beginning, Samsung was already established as a top market player with the reputation of releasing premium flagships. If OnePlus was to compete with Samsung, they needed to do something different.
OnePlus began by partnering with Cyanogen Inc., a custom ROM manufacturer for Android. Post this partnership, they got themselves published on influential websites and blogs like GSMArena and Android Authority. Once the public relations campaign was well underway and before the sale of the first OnePlus One device, the Company created an invitation only and internet only sales system. Interested buyers had to register themselves for a list which was on a first come first serve basis and the sale took place only online. This unique approach also created a buzz which was good PR. As OnePlus founder Pete Lau said in an interview with Larry Downes and Paul Nunes of Forbes, “We created the invitation system to manage uncertainty. We don’t know how many people will buy our products at any given time. Our approach helps us make an accurate sales forecast. If one phone sells for $ 200, for example, 50,000 units equals $ 10 million, 100,000 units equals $ 20 million and so on. Creating these kinds of inventories means taking on a huge financial risk. So we manage that by getting earlier insight into real customer demand through invitations.”
Identifying their geographic markets
After the success of the OnePlus One, OnePlus decided to come up with OnePlus Two and took the same approach—invite only and internet only sale. They tied up with Amazon as their exclusive selling partner in India. The demand for the smartphone was so high, they failed to keep up with the sales. OnePlus was always vocal about being in constant touch with their users on their forums in order to listen to feedback and they were surprised by the response of Indians on their forums. Currently, India is the largest market for OnePlus, contributing to up to 35 % of its revenues. The Amazon partnership worked so well, OnePlus decided to replicate it in its other markets as well by partnering with local e commerce and mobile carriers.
Perfecting the customer service experience
OnePlus remains dedicated to their motto of ‘Never Settle’ and they adopted it for their after sales services as well. They realised the need for a good customer service experience and committed themselves to opening service centers at multiple locations. In India, OnePlus is able to resolve 70 % of customers’ queries within an hour. As Vikas Agarwal, the General Manager of OnePlus India, explains, “It took us almost two years to have these centers where we guarantee to repair the device within one hour. Today, we are able to resolve 70 percent of queries within an hour. As part of enhancing the experience, two years ago, we also published the prices of our spare parts to bring in transparency.” Apart from this, they have free coffee, WiFi, XBox consoles and magazines, which elevate the customer experience. Their over the air (OTA) updates are usually continued for 3 years, which is a lot in the Android industry.
OnePlus was able to focus on developing a product which was cheap but exhibited a premium feel. It was able to provide a product for half the price at which flagship smartphones are sold. They achieved this due to their disruptive pricing, innovative marketing and good customer service. This let them capture the Indian smartphone market, which is considered as a huge revenue source by other smartphone providers, owing to the demographic dividend. Riding on their success, OnePlus also recently launched a new television, the OnePlus TV. It is likely OnePlus will ‘never settle’ and continue expanding its business.
