RIP OnePlus X: Why the phone was killed

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18-Jul-2016

 

Chinese phone maker OnePlus’s decision to stick with its flagship line of devices was taken after it concluded that it lacks the scale to reach out to a new customer segment that buys cheaper phones, the company’s co-founder Carl Pei said.

“For us to make the OnePlus X, we had to reach out to new people, and at this scale we cannot reach out to new people, we need to focus. So, being small has it’s downsides, we don’t have enough bargaining power for instance,” Pei told FactorDaily in an interview.

Recently, the company discontinued OnePlus X, a lineup of cheaper phones retailing between Rs 14,999 to Rs 22,999. In June, the company launched OnePlus 3, its latest phone in the premium segment (See: OnePlus 3 Review).

“OnePlus X wasn’t really budget but we got sidetracked. If we wanted to grow right now, we’d immediately go and get a 10k, but I think that’s a very short term way of looking at things,” Pei said. The three-year old Chinese smartphone maker burst into the crowded Android market in 2013, with a promise to offer a flagship experience at a lower price.

OnePlus does not disclose numbers as a policy, and hence the number of OnePlus X units it has sold so far is not available.

“It would have been better if someone like Samsung released it (OnePlus X). I’m sure they could have sold a lot of it,” Pei said. OnePlus wants to focus all its energies one flagship smartphone a year, and has no plans of returning to the budget category.

Faisal Kawoosa, the lead analyst, telecom practice, at research house CMR believes the OnePlus decision will mean it will stay a niche player. While there are opportunities in the flagship segment, the Indian market remains tilted towards entry-level phones, Kawoosa said. He does not see OnePlus emerging as a major player in the overall market if it focuses on just one segment.

“They will remain a niche brand for couple of years. won’t be seen as impactful and leading brand in the overall market,” Kawoosa said. However, OnePlus is betting on the fact many Indian consumers would want to upgrade their phones in the days to come.

“They’d want a really solid product with an aspirational brand that they can upgrade to,” said Pei. “We know that the market is not here yet but we are going to place ourselves here and then we are going to wait for the market to come,” he said.

Kawoosa agreed that there is an upward swing in the market and the replacement market has become synonymous with upgrading. And there will be more opportunities for higher price band phones and players like OnePlus, he said.

Speaking on other Android players who have tried to take the niche path, Kawoosa said, “it worked for a couple of them, but never saw them growing too big.” Sony shelved entry level products, while HTC remained focussed on high-end for a long time, he said.

Pei believes it’s really hard to stand out in a the fiercely competitive smartphone market, and being focussed allows them a better chance of making an impact.



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