The best thing about the new $329 OnePlus 2 is its hubris

29 Jul 2015 | Author: | No comments yet »

OnePlus 2 hopes to be a new flagship killer to rival iPhone, Galaxy.

The Chinese upstart calls it a “2016 flagship killer,” suggesting that its new $329 smartphone model is better than next year’s competitors. (Yes, next year’s.) OnePlus, a rising smartphone star in China, released a new, top-of-the-line product this morning.

NEW YORK — On the heels of last year’s sleeper hit, Chinese start-up OnePlus has announced a new phone that promises iPhone-type specs at half the price. It’s based on Google’s Android operating system, as most phones that don’t start with “i” are, and has the latest mobile innards: A Qualcomm Snapdragon 810 processor rated at 1.8 GHz, four gigabytes of memory, 64 gigabytes of storage, 13- and five-megapixel cameras, a fingerprint sensor, and a 5.5-inch screen (about on par with the iPhone 6). OnePlus has also promised that it will be hosting pop-up events in 9 cities including New Delhi and Bangalore on July 31 to help users experience the new OnePlus 2. I’ll leave it to Fortune’s Jason Cipriani, who will soon answer that question in a forthcoming review.) Most important, it’s $329 without a contract. Similar to the One, the device will support AT&T and T-Mobile’s LTE networks in the U.S. and will be sold “unlocked” so users can freely switch between the networks or easily use the phone outside the U.S..

That seems expensive to American consumers used to phones (on contract) in the $200 range, but consider that the iPhone is roughly $650 without a two-year service plan and Samsung’s Galaxy S6 is $685. The new model looks to be an improvement over its predecessor in nearly every way. “We started this company because we didn’t think any Android phones on the market were good enough,” OnePlus director and co-founder Carl Pei said. “We still think that’s the case, and we learned a lot from the OnePlus 1. This is a strategy we’ve seen time and time again from Chinese manufacturers: Match the competition’s hardware and software and undercut them on price. The display puts the OnePlus in the phablet category and in direct competition with phones like Apple’s iPhone 6 Plus and Samsung’s Galaxy Note line, which boast similarly sized screens (though Samsung’s is at a higher resolution).

The OnePlus 2 not only flagship worthy, but something that will remain cutting edge next year as well.” The first thing you notice when picking up the OnePlus 2 is that the company’s sandstone-feeling rear cover is now flanked with an elegant aluminum and magnesium alloy frame. It’s a page ripped directly from the South Korean playbook, itself ripped from the Japanese playbook. (For more on this dynamic, as well as the rise of OnePlus, read “Enter the Dragons,” Scott Cendrowski’s feature in the March 2015 issue of Fortune magazine.) But despite the hyperbole and hyperventilation in the tech press this morning—”So good it makes me want to leave Verizon,” one early reviewer breathlessly wrote; “pushes the boundaries of what a flagship phone can be,” wrote another—the bigger strategic maneuver for OnePlus is clearly found in the business model. The marketing doesn’t hesitate to encourage it: “Never Settle” is the company’s slogan. “We believe that great products come from great ideas, not multi-million dollar marketing campaigns,” is a Samsung-targeted line it regularly trots out, even as it tries to reconcile both concepts in international courts of law.

It’s easy, of course, for a small company to punch up at the big giants; it’s got little to lose by starting a war with the incumbents. (Take note, 2016 U.S. presidential election contenders.) But OnePlus should not forget that those five companies—two Korean, one American, and two Chinese—comprise more than half of the global market for smartphones, per IDC’s latest estimates. While ascendant, OnePlus is still obscure to most consumers around the world, and it has yet to truly dominate its own, extraordinarily competitive home market. But with attitude aplenty, OnePlus may have already won an important battle before ever having shipped a single unit of its new model: The one for the minds of consumers who look at smartphones and see Apple, Samsung, and no one else. While the invite system may disappoint fans, in an interview with USA TODAY earlier this year, OnePlus founder Carl Pei justified the system as way to better manage inventory. OnePlus 2 will require invites to buy the device but this time the company is promising a reservation list, more inventory and a “quicker rollout of shareable invites.” The company says that the first couple of OnePlus 2 invites will be given to the earliest supporters, forum members, early OnePlus buyers.

While that’s tiny compared to Apple’s yearly iphone sales, the volume was seen as impressive for a start-up, and the company quickly grew popular among the tech and social-media savvy. To share invites, a user will get 1-2 weeks and initially the number of shared invites that can be sent out will be low, and it will increase as production ramps up. “The more you share, the more invites to share you get,” says OnePlus.

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