Market Insight

Flagship Killer; Slaying Smartphone Price Inflation with the latest 6.67” Full Display OnePlus 7Pro

May 14, 2019


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OnePlus has always been associated with technology fandom, gorilla marketing and appealing to a limited subset of addressable smartphone consumers who tend to track younger and more tech savvy.  The company famously restricted access to initial sales to a referral-only model in order to drive attention and gain free publicity.  In the Chinese market, OnePlus would regularly put on flash sales of limited quantities of devices for very modest prices to drive eyeballs much like Black Friday specials in the US drive sales traffic right after Thanksgiving.  Those early days of OnePlus clearly cemented their brand with distinction in the larger marketplace of smartphone OEMs as one that is keenly in touch with their customers aiming to building something great for not a lot of money.   

Fast forward to today, OnePlus announced their latest flagship smartphone called the OnePlus 7Pro, a 6.67” full display smartphone featuring a pop-up selfie camera.  Thie OnePlus 7 Pro is different than previous products in so much as the bevy of high spec hardware components used (whereas previous models had famously been designed with limited features to control cost) and strategically priced ultra-premium configuration for just under $750.  Following the success of last year’s OnePlus 6T introduction on the T-Mobile network, the Shenzhen-based smartphone maker is building on the toe-hold it has achieved in the coveted US market and doubling down on their partnership with T-Mobile for the OnePlus 7Pro.  OnePlus has developed a large following in India as well as Europe as an anti-establishment brand that is offering consumers premium devices at honest pricing.  The US market, however, is notoriously difficult to penetrate due to a majority carrier distribution, so to gain a carrier partner in the US is by no means a small feat.   

 

The OnePlus 7Pro’s design is a slight departure from the company’s previous smartphone releases with a more than incremental improvement on componentry and price.  The “Pro” designation is a nod to the ever-increasing complexity and cost of premium flagship device from global giants such as Apple, Samsung and Huawei with some reaching over the $1000 mark.  Bring forth a unique full display design and a whopping 6.67” OLED screen, OnePlus is attempting to elbow its way into the flagship conversation with a China-first design.  The OnePlus 7Pro starts at $669 and goes up to $749 for the 12GB RAM version; clearly signaling its intent to steal sales from the Apple iPhone XR. 

 

The US smartphone market is littered with failed new entrant brands attempting to conquer the heavily carrier-driven US smartphone market.  Many have attempted to go the open channel distribution route but that often fails to gain traction.  Brands such as Alcatel, ZTE and Kyocera have had long histories with the US market as tier II value OEMs but they are increasingly being squeezed out by Apple and Samsung.  More recently, LeEco and Huawei attempted to score carrier relationships and find an audience with American consumers but either business failures or geo-political factors had interrupted those plans.   While achieving modest success with T-Mobile in 2018, OnePlus is investing in its brand and putting its best foot forward with the OnePlus 7Pro hoping to solidify itself as a house-hold name in the US market. 

 

More options in international markets

 

Beyond the US, OnePlus is holding simultaneous events in London and Bengaluru, India. In markets outside the US, OnePlus will bring two additional new devices to buyers. In addition to the Pro version, a OnePlus 7 device will feature smaller technological upgrades and be a more natural successor of the OnePlus 6T from last year. This device features a teardrop-notch display and dual camera set-up and leaves out the motorized pop-up selfie camera. However, the OnePlus 7 is powered by the same Qualcomm Snapdragon chipset as the Pro version.  Additionally, a 5G version of the OnePlus 7 Pro will come to EE in the UK and Elisa in Finland next month. 

 

Not only is OnePlus moving up the premium pricing scale, but the company is also broadening its device portfolio. In the past, the company has updated its latest handsets with new color options, or in connection with brand partnerships. Now, the company gearing to do two things: become a bigger player in the premium segment, while at the same time remaining true to its brand promise by introducing multiple devices – one of which fits into the historical pricing segment OnePlus has been addressing. 

 

OnePlus is stretching itself in two ways with this latest launch: the company is launching more than one device and not all markets will receive both devices. Secondly, the company is trying to move into the top tier of premium pricing. Arguably one of the reasons for OnePlus’ success in India has to do with the fact that its premium pricing is below that of the competition. With the Pro, OnePlus is reaching beyond that and is clearly targeting markets beyond India. In Western European markets, this means competing with other Chinese, like Huawei, Xiaomi, and OPPO – all of which have already invested in carrier partnerships and are also physically present in the market.  It will require a significant change in operating modus from OnePlus to match this market presence.  

 

In the US, OnePlus will face increased competition from the latest Pixel devices, announced by Google last week. With the Pixel 3a/XL, Google is reversing course on its smartphone pricing and is targeting the mid-range again – like the pricing of the Nexus devices. The difference between Nexus then and Pixel now is that the Nexus devices featured high-end components, where the latest Pixels do not have high-end specifications. Butthe latest Pixel devices will be available through three of the four largest US carriers. OnePlus is limited to T-Mobile.  The questions OnePlus faces in the US: is its brand strong enough to overcome competition from a brand like Google, both of which are attracting similar users? Will OnePlus users make the step up in pricing? How much will broader carrier support for Pixel impact OnePlus’ strategy in the US?  OnePlus will hope that it’s brand building has been strong enough in the US and that Google’s strategy will not be an attractive option for the core users OnePlus has been targeting.

 

What makes the OnePlus 7Pro a “Pro” design? 

 

OnePlus, the company, has OPPO Electronics as a majority investor and therefore has close ties to the Chinese manufacturing ecosystem and China-focused design language.  Of the most recent design trends amongst Chinese OEMs like OPPO, Vivo, Huawei and Xiaomi have been the use of full display screenor in other words, bezel free designs.  This design has led to a to creative solutions to the placement of speakers, sensors and most importantly, the front facing camera. 

 

The benefit of full display designs is the avoidance of display notch; however, it also presents a challenge to design in the front facing camera.   While speaker grills can be pushed to the edge or replaced to screen actuated systems, the front facing camera requires a non-obstructed view of the user.  In order to design around the full display, OEMs have started to use a physical extension such as pop-up or sliding designs to accommodate the front facing camera.  Of course, adding moving parts to a slate form factor will introduce other challenges such as physical reliability as well as water resistance however, these compromises are acceptable in markets such as China to create a fuller and more immersive display. 

 

Beyond the full display design, the OnePlus 7Pro is configured as follows: 

 

  • Snapdragon 855 SoC (LTE CAT-20) 
  • Configuration with up to 12GB of RAM/  UFS 3.0 NAND storage 128/256GB
  • 90Hz display refresh rate 
  • Triple camera setup with 3x optical zoom (Dual camera on OnePlus 7)
  • Improved in-display [optical] fingerprint sensor 
  • New proprietary [wired] fast charging system (Warp 30) 
  • Pop-up selfie camera (Not available on OnePlus 7)

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