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Exclusive: OnePlus will make cheap phones again—and ramp up its platform

In a strategic shift, the smartphone maker will return to its low-cost roots and expand beyond smartphones to take on the tech giants more directly.

Exclusive: OnePlus will make cheap phones again—and ramp up its platform
Pete Lau [Photo: courtesy of OnePlus]

OnePlus wants its products to be surprisingly cheap again.

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That’s one takeaway from an interview with founder and CEO Pete Lau, who describes how the Shenzhen, China-based company is shifting strategies after six years in the smartphone business. Once known for selling nice phones at hard-to-believe prices, OnePlus wants to get back to making more affordable phones while also expanding into new product categories, Lau says.

OnePlus isn’t revealing any of those products yet, but a glimpse of the new strategy will arrive soon with an announcement for India. Later this year, the company hopes to bring lower-priced devices to other markets, including North America and Europe. The ultimate goal is to sell a lot of phones with lower price tags, then spin them into an ecosystem of connected devices.

“We can look at it as having a more affordable product offering,” Lau says through an interpreter, “but all products that still remain up to the OnePlus standard . . . and through this enabling, more people to have access to OnePlus products.”

Back to roots

Six years ago, cheapness put OnePlus on the map. The original OnePlus One was a groundbreaking phone, selling for $300 at a time when unlocked iPhones cost more than twice as much. While the phone wasn’t quite up to flagship standards, it had a slick design, a large screen, a speedy processor, a fairly decent camera, and long battery life. The fact that it sold exclusively online through invites and flash sales added to the new brand’s mystique and helped it build a community of fans.

Since then, the price of OnePlus phones has ticked upwards, keeping up with the industry trend of increasingly fancy smartphones at higher prices. That price creep culminated in last month’s launch of the OnePlus 8 and OnePlus 8 Pro. At $700 for the former and $900 for the latter, the phones have strayed far afield from OnePlus’s original appeal.

The new strategy is, on one level, a return to OnePlus’s roots. The premium phone push hasn’t been a failure for OnePlus, which cites data from Counterpoint Research showing it ranked fourth in shipments for phones priced $400 or higher, behind Apple, Samsung, and Huawei. OnePlus also hasn’t indicated that it will stop making higher-end models. Still, abandoning cheaper tiers may have alienated the brand’s original fans and anyone else who feels neglected by ever-pricier phones.

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“What we’re seeing is that with current products, there’s still a demand from a large consumer base for a more suitable price that enables more consumers to be able to access OnePlus products,” Lau says. “That’s really important insight, and it’s something that we’re taking into very serious consideration.”

Beyond the phone

While the return to cheaper phones might seem like a retreat, Lau says it’s all part of a bigger plan.

Last year, OnePlus started selling a smart TV in India, and it has dabbled in selling wireless neckband earbuds. Lau says to expect more forays into other categories beyond the smartphone. The hope is to create enough scale to offer a common ecosystem across devices, as Apple has done so successfully and other Android-based makers have also attempted to varying degrees.

“We indeed have come from background and roots as a hardware company, but from what we see looking forward, building an ecosystem is a forward trend,” Lau says.

Yes, this is another case of a hardware company getting smitten with software and services, which is something that hasn’t always gone well. Samsung and LG remain best known for their manufacturing chops despite many efforts to build portfolios of services around their phones, smart TVs, and appliances. The PC maker Acer once tried dabbling in cloud storage services, only to retreat several years later.

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The problem is that hardware vendors must contend with the dominant platforms on which their devices rely. Only Apple controls all of the ingredients of its own devices, from chip to operating system to app store. OnePlus depends on Google’s Android operating system for both its phones and its smart TV, and finding ways to stand out won’t be easy.

Still, Lau says opportunities exist. As early examples, the company points to how its smart TV has a shortcut for switching between apps and can automatically reduce volume when a call comes in on OnePlus phones. (OnePlus also mentions a mobile remote control app for its smart TVs and a feature that shares Wi-Fi credentials across devices, although similar features are available in Android proper as well.)

“You have an Android foundation, but it’s really looking at this seamless experience where it gets challenging, where Android won’t create a full solution,” Lau says. “Android’s able to bring it from zero to one, but it’s the one to 10 that you really have to put a lot of work into yourself.”

What is OnePlus, anyway?

OnePlus isn’t just building an ecosystem on its own. The company also has help from Oppo and Realme, two other Chinese smartphone brands with a common investor named Oplus. This is the first time OnePlus has publicly acknowledged the investor’s name.

OnePlus’s ownership structure has long been a point of confusion, especially since the company has long positioned itself as a scrappy startup taking on the giants of consumer electronics. Several reports have claimed that a Chinese corporation called BBK Electronics operates OnePlus, Oppo, Realmi, and another brand called Vivo. However, Oppo denied any relationship with BBK in a statement to The Verge in 2018, and OnePlus has always maintained that it is an independent company. Asked for clarification, OnePlus only says that Oplus “is a private investor group and has no direct affiliation with BBK.”

Why does any of this matter? For one thing, the companies share a supply chain and manufacturing resources, which explains why Oppo and OnePlus phones often have a lot in common. But Lau, who worked at Oppo for over a decade before founding OnePlus, also suggests that Oppo devices will help his company achieve the scale it needs for its ecosystem ambitions.

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“OnePlus remains an independent company, but what this means is there’s a larger base of users across this group for potential access to building out a wider ecosystem,” he says.

In practice, the implications are a bit fuzzy. Are OnePlus and Oppo pooling software resources as well? Will connectivity features on OnePlus devices be compatible with those of Oppo devices? For now, OnePlus isn’t saying, but it does seem like the companies are getting more comfortable talking about their relationship.

With any grand ecosystem plan, there’s a risk of losing focus on what made a company successful in the first place. A few years ago, for instance, the Chinese device maker Xiaomi admitted that it grew too fast and lost smartphone market share as a result. Looking back further, HTC never recovered after flooding the market with phones in all shapes and sizes and losing its edge in Android flagships; eventually, it sold most of its smartphone operation to Google.

Lau says OnePlus will be different, as the company is growing in a sustainable way. Last month, it laid off roughly 20 employees in Europe—the company employs more than 2,000 people—and scaled back regional offices in the United Kingdom, France, and Germany. OnePlus said it was a “normal restructuring,” but Engadget reported that the company wanted to focus on healthier markets.

Lau says a recent carrier deal with Elisa in Finland, overall success in Scandinavian markets, and budding partnerships with T-Mobile and Verizon in the United States are all evidence of how the company is now steadily building on what works. Expect the same, he says, as the company expands into new areas.

“OnePlus is still a young brand,” Lau says. “We are a company that’s constantly considering, evaluating, iterating, working on our strategy, continuing to improve our strategy to really be focused on creating a long-term, sustainable success.”

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