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China's OnePlus targets flagship phones from big players

Michael Kan | Jan. 8, 2015
Carl Pei is only 25 and his one-year-old startup has set out to figuratively kill the other leading smartphones in the market.

But unlike other Chinese smartphone makers that have first focused on the home market, before going international, OnePlus began selling its handset to foreign markets from the outset.

"The Internet has made the world so flat, you can communicate with anyone, anywhere nowadays," said Pei, who grew up in Sweden, and leads OnePlus's 80-person international team. "I don't think there is a reason to limit yourself anymore. If it's a good product you should share it with the world."

Sharing that product, however, hasn't always been easy. In a way, the OnePlus One is a bit too good to be true. The company has thin profit margins, and doesn't want to overproduce stock that it won't be able to sell.

As a result, supplies of the phone have been limited. The company sells its product directly to customers through its website, cutting out the need for resellers or physical stores. But to obtain a phone, a customer has to go through the company's "invite system."

In the U.S., for example, consumers interested in buying the device, have to first receive an invite from someone who already purchased the product. Or they can receive an invite by participating in the company's online contests.

The system rewards the more devoted followers, but has made the product tough to buy. Back in October, when the company briefly opened sales to all U.S. customers, the OnePlus website for orders temporarily went down due to all the traffic.

"The user experience from our side hasn't always been the best in 2014," said Pei, who noted that the U.S. was one of its bigger markets. Given that OnePlus has become aware of the demand, the company will pump out more units to prevent shortages, although it will still be cautious to not overproduce, Pei said.

"In the beginning of a product life cycle we're going to keep using the invite system to control our risk," he added.

After witnessing a fast, but somewhat bumpy rise, OnePlus in 2015 is focusing on refining its operations and improving its customer service. "This period that we have now is a very good time for us to become a lot more professional," Pei added. "Last year, when we just started the company, on the global side we were just four or five people."

Fans of the company can expect the next generation OnePlus flagship phone to arrive in about six months. In addition, the company is developing another separate handset model.

"I think its going to be a phone catering to a different type of audience. Perhaps for those who appreciate design over specs," Pei said.

In the past, Chinese-branded phones haven't always been respected in the U.S., and have sometimes been derided as shoddy. But OnePlus could help change that perception.

 

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