For years, the tech industry has been waiting on a unicorn device: a great, low-priced smartphone.
While most other technologies keep getting cheaper, many of today’s high-end smartphones cost upward of $650, which is more than the price Apple slapped on its very first iPhone, way back in 2007.
That price is usually hidden inside a carrier plan; you generally pay only $200 or so when you sign up for the phone, and then pay the rest over the course of your contract. Still, the full price is nothing to sneeze at. If you keep your new iPhone 6 or Samsung Galaxy S5 for two years, you are looking at a minimum of $27 a month just for the device. Top-tier smartphones cost more than most laptops and desktops, more than a lot of TVs and home appliances, and more than the fanciest dinner for two in New York (probably).
Isn’t it time high-end smartphones were cheaper? Are they worth all that much money? Is there any way around the sticker price?
Well, a unicorn just galloped onto the horizon. This month, OnePlus, a start-up based in Shenzhen, China, will begin taking pre-orders for the One, a fantastic low-price phone that tech enthusiasts across the globe have been lusting after for months. (Until the pre-order system goes live, the only way to get a One is by snagging a coveted invitation.)
I’ve been using the One for the last couple of weeks, and I’ve found it to be one of the best smartphones I’ve ever used. The One has a beautifully spare design, it’s loaded with the latest tech specs, and it runs CyanogenMod, a version of Google’s Android operating system that is far more flexible and easier to use than the cumbersome flavors of Android now stuffed into rival phones.
Best of all, the One sells for $299. That’s not $299 with a carrier plan or some other commitment. That’s $299 total, or less than half the price of a top-tier phone from Apple, Samsung or HTC. After you pay that price, you own the phone. If you take it to a carrier like T-Mobile, which offers a discount on your cellular plan if you bring your own phone, you can end up saving a substantial bit of cash in the long run.
And yet, the One is not going to work for most people — yet. That’s because it comes with many caveats and warnings. Among them: You will have a devilishly difficult time getting customer service for your phone, including getting it repaired if something goes wrong.
Still, the company may be on to something. If OnePlus can navigate the perils of the cutthroat smartphone business, it may be giving us a peek of the glorious future of great, cheap phones.
OnePlus was founded late in 2013 by Pete Lau, a veteran of the Chinese tech business who was taken with the idea of creating a high-end smartphone for the masses. His vision was not unique; as the price of the components in smartphones plummeted over the last few years, a rash of Chinese start-ups emerged to make high-quality, low-price phones.
These devices are radically shifting the mobile industry in China and other parts of the developing world. This summer, Xiaomi, another start-up that sells its low-price phones in China, surpassed Samsung as that country’s top smartphone vendor, according to the research company Canalys. Samsung’s profits are being battered by the intense competition from low-priced rivals.
But OnePlus is unusual among Chinese phone makers in that it believes its market extends far beyond its home country. Early on, Mr. Lau divided the company into two semiautonomous units, one catering to Chinese consumers and the other devoted to the international market.
Carl Pei, who directs the global division, said that of OnePlus’s global staff, a third of the employees are from Asia, a third from Europe and a third from the United States. “We don’t really think of ourselves as a Chinese start-up,” he said.
After winning a few glowing reviews this year in the American and European tech press, the One became a sensation among techies far beyond China. “Very soon our sales outside of China will surpass sales in China,” Mr. Pei said during a recent interview.
While he would not provide exact sales numbers, Mr. Pei said the One was selling in the “mid-to-high four figures a day in the U.S.,” which he said constituted 30 percent of the company’s market. That would imply sales of 150,000 to 300,000 phones a month in the United States, and up to a million devices a month over all — a rounding error in the global smartphone business, but an admirable feat for a tiny, year-old start-up.
It’s not surprising that people are clamoring for the One. It is just about the fastest Android phone you can buy, and its 5.5-inch screen is stunning. My only complaint with the device has to do with the camera, whose pictures cannot match the sharpness and color accuracy of some of its rivals.
Otherwise, the One is better than most other Android phones on the market, including Samsung’s Galaxy S5 and HTC’s flagship phone, which is also called the One. (Yes, there are now two Ones.) I give the OnePlus One the edge primarily for its user interface, which is cleanly minimal, uncluttered with all the pointless gimmicks and unnecessary apps found in many rival Android devices. In that way, the One is similar to Google’s Nexus 5, another high-quality, low-price phone — but over all, the One is more powerful, and far prettier, than the Nexus.
The problem with the One, though, is that OnePlus’s future is far from assured — and that future matters to the longevity of your phone. “To be perfectly honest, we’re not sure about our business model,” Mr. Pei said, noting that at the moment, the company does not make much of a profit on each phone it sells.
He added that in the future, the company might begin to make money by teaming up with software companies that would preinstall apps on the phone, or by expanding the range of accessories for its device.
Even in the absence of a business model, the company is planning rapid expansion. It is hiring customer service experts to better handle problems, and it plans to hire local teams in some of its markets to provide faster service. It’s possible that by selling a great phone at a great price, OnePlus could stumble into profits, and become the next big global smartphone brand.
But betting on OnePlus’s survival is a $300 gamble. Jan Dawson, an independent analyst, points out that by comparison, the established smartphone market does not ask customers to make such a leap. The major carriers now offer zero-down, interest-free financing plans for high-end phones, meaning that customers can get a $650 phone for $30 monthly installments.
“Even though the iPhone may be significantly more expensive, today you’re going to be paying only a tenth of what you’d pay to get the OnePlus phone upfront,” Mr. Dawson said. If your iPhone breaks, you can always go back to the store to get it fixed. And if you want to get rid of it, there will always be a large, willing market to take it off your hands. Isn’t that certainty worth the extra coin?
For many users, that will be true; the $650 smartphone isn’t going away tomorrow. But the One ought to give established players pause. Great, cheap phones aren’t just for China. Soon they’ll be everywhere, and eventually, one could be right for you.
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