2015.01.12
A Dark Horse Finding the Light in the Smartphone Industry, 'OnePlus'
News SquareOPINION
The column section written by AP Group members.
Local Chinese Corporate Innovation Story
Episode 5. A Dark Horse Finding the Light in the Smartphone Industry, 'OnePlus'
- COLUMNIST
- APC Product Support & Consumer Service Team Rho, Kyung-mo
What I want to introduce to you today is a Chinese smartphone brand. When we talk about Chinese smartphones, no doubt many of you would think of the sensational Xiaomi first. Yet, there is a fast emerging smartphone brand that is seen as the next Xiaomi or even more. And the brand? 'OnePlus.'
The American IT blog 'Gizmodo' recently published an article detailing the seven most important IT gadgets of 2014. (See article). The list includes Samsung's Galaxy 4, Apple's iPhone 6, and OnePlus, which is probably unfamiliar to many of us. The prominent US business news website 'Business Insider' conducted a similar ranking around the same time, this time looking at the 17 best smartphones of 2014 in the world. First, second and third on the list were the iPhone 6, iPhone 6 Plus, and Galaxy 4. Other leading global smartphone brands such as Nexus, Sony, and HTC also featured prominently in the list. But, it was the inclusion of a certain OnePlus that grabbed the attention. You see, OnePlus was rated higher than LG, Google's Nexus, and even the iPhone 5S.
What is all the fuss about OnePlus?
The American IT blog 'Gizmodo' recently published an article detailing the seven most important IT gadgets of 2014. (See article). The list includes Samsung's Galaxy 4, Apple's iPhone 6, and OnePlus, which is probably unfamiliar to many of us. The prominent US business news website 'Business Insider' conducted a similar ranking around the same time, this time looking at the 17 best smartphones of 2014 in the world. First, second and third on the list were the iPhone 6, iPhone 6 Plus, and Galaxy 4. Other leading global smartphone brands such as Nexus, Sony, and HTC also featured prominently in the list. But, it was the inclusion of a certain OnePlus that grabbed the attention. You see, OnePlus was rated higher than LG, Google's Nexus, and even the iPhone 5S.
What is all the fuss about OnePlus?
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OnePlus One
OnePlus means two things: 'One' denotes 'the Status Quo' and 'User,' while 'Plus (+)' carries the meaning of 'Improvement' and 'Sharing.' In other words, the name signifies a brand that seeks ways to improve on advanced products, rather than being satisfied with the status quo, and that OnePlus users would like to share the good products of OnePlus with their friends and family.
OnePlus emerged as 'the next Xiaomi' within just a year of its foundation
"Never Settle" – this is the OnePlus slogan, which captures the brand's tenacity to make innovative products, rather than churning out slavish imitations of its competitors.
The startup was founded just a year ago, in December 2013, by a person who had worked at the Chinese smartphone manufacturer OPPO. Its first product, launched last April, quickly caught the attention of the global market for its superior performance to other smartphones available then on the market and its much lower price-point of only around 300 US dollars. Despite its short history, OnePlus has already sold over 1 million units in the global market, including the US and the European markets, and emerged as a dark horse in the mature smartphone market.
Then, what's the secret?
The startup was founded just a year ago, in December 2013, by a person who had worked at the Chinese smartphone manufacturer OPPO. Its first product, launched last April, quickly caught the attention of the global market for its superior performance to other smartphones available then on the market and its much lower price-point of only around 300 US dollars. Despite its short history, OnePlus has already sold over 1 million units in the global market, including the US and the European markets, and emerged as a dark horse in the mature smartphone market.
Then, what's the secret?
1. The goal has always been "Global Diffusion"
OnePlus was founded with the goal of going to a global market. Forty percent of the company's 2014 sales, which is equivalent to 400,000 of its 1 million phones sold, were generated from the US market. OnePlus takes a different path from its more famous competitors, Xiaomi, Huawei, and Lenovo, which their eyes are now on the Chinese smartphone market. From the beginning, OnePlus implements two different strategies: one for the Chinese local market and one for the global market. Furthermore, its overseas strategy is broken down by region, including the US, Europe, and Asia. The company focuses on brand reputation in the US market, on sales volume in the Asian market and maintains the same number of employees for each region of the US, Europe and Asia to balance its different regional markets. As a result, the company became the first Chinese startup to be introduced by major media outlets such as the New York Times, Wall Street Journal, and the Times. Its smartphone was highly praised as the best low price smartphone. Some press outlets have even dubbed OnePlus 'the Nexus Killer.'
2. Constant Research on Consumer Purchase Behavior
① Focus on Digital Channel
Pete Lau, the founder of OnePlus, recently visited Korea to attend an event. At the event, he opined that the key factor to the brand's success was its channel strategy. It was this which differentiated it from its competitors."The key to the success of OnePlus was that we listened to the consumers and tried to meet their needs through our products. We sell all our products through a network, which saves on production costs and means we are able to maintain our competitiveness. These factors have enabled OnePlus to make the remarkably successful soft landing it has done in the global smartphone market less than a year after it was launched."
It has an offline store 'OnePlus' in Beijing, but it focuses more on promotion and the voice of the customer (VOC) to capture their needs, rather than focusing on sales.
② Make Products that Consumers Want
OnePlus says that its quality of hardware is equivalent to its competitors, but that it does not emphasize hardware specification. That is because OnePlus knows that consumers are not generally aware of the slight differences between technical specifications and that, moreover, specifications are not the key buying factor (KBF) that consumers consider when making a purchase. Having said that, the hardware of OnePlus phones rivals those of its leading global competitors and, indeed, exceeds them in many respects when it comes to advanced technology."Competition based on hardware specifications is meaningless. We need to make a product that meets customer needs, a product that customers really want."
OnePlus focuses on only two features as far as hardware is concerned: a smartphone that offers good grip and a battery that does not get too hot after two to three hours of using the phone for games. A phone with these features fits the needs of its main target consumers, who are those in their 20s and 30s, and indeed the phone was developed after studying their lifestyle. The phone thus represents the culmination of the OnePlus philosophy to develop products that can satisfy consumers.
3. Xiaomi tied up with patents, OnePlus hurdles the patent barrier.
Even considering the rapid changes sweeping the IT industry, the Chinese market environment changes remarkably quickly.
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Chinese manufacturers: Huawei(华为), Lenovo(联想), Xiaomi(小米), ZTE(中兴), Vivo, Coolpad(酷派), TCL, Gionee(金立), Oppo. Source: Shanghai Journal
Only a few months ago, the media was talking about Xiaomi as a threat to Samsung, but there is already a new brand that is expected to triumph over Xiaomi. Ultimately, Xiaomi is hamstrung by patent disputes which force it concentrate on the Indian and Chinese markets, where protracted lawsuits with competitors are ongoing. By stark contrast, OnePlus can trade free from patent worries as it developed its own Android-base OS. Competition on hardware among global mobile phone manufacturers has reached its limit. We are now living in an era of generic smartphones, which often surpass those of the leading manufacturers when it comes to features and specifications. And this trend is only likely to accelerate. Xiaomi had been a good example of a company benefiting from this trend, until it encountered the patent barrier. OnePlus, seeing how the patent issue had blocked Xiaomi's path to the global market, developed its own OS. OnePlus's 'good hardware,' 'low price,' and 'native OS' were the three factors behind its surging popularity in the US and European markets.
OnePlus Founder Pete Lau on the Future for the Brand
Founder and CEO : Pete Lau, Source : The Korea Economic Daily
The performance of OnePlus phone is as good as Samsung's Galaxy, but its price is half of that of Samsung's. Industry watchers report that OnePlus has strengthened the reputation of Chinese-built smartphones and demonstrated its clear potential to go global.
"I gained abundant sales experiences in overseas markets like Europe and the US in my work for OPPO. This is what enabled me to help OnePlus secure a good customer base in the US and European markets. We will keep concentrating on overseas markets and on our products, just like we always have done."
Lau's answer to the question regarding the key to OnePlus' success shares a lot with the brand's philosophy 'Never Settle.' OnePlus thinks outside the box and concentrates on a strategy covering the 'global market, digital channel, and customer-focused products.' This enables the company to grow at a rapid pace in the global smartphone market, which most experts dub the red ocean. That is why we need to keep a close watch on the moves this company makes.
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