OnePlus is on the way to change the negative perception of Chinese phones
Finally, a Chinese homegrown smartphone brand has made a big entry into the largest economy in the world with its premium phone model. With the collaboration of OnePlus and a major US telecom carrier, the company is about to prove to the world that homegrown brands of Chinese phones are not cheap, substandard handsets.
Pete Lau who is the founder and president of OnePlus told reporters that the level of confidence in Chinese brands will receive a boost with the introduction of the OnePlus 6T smartphone to the US market through a US carrier.
Last month, T-Mobile and OnePlus made a joint announcement regarding the exclusive deal that brings the premium OnePlus 6T smartphone model to over 5,000 stores operated by T-Mobile which is the third largest mobile carrier in the United States.
In his statement, Lau said that this pact serves as the first instance that a Chinese mobile phone company will make an entry into the premium subsector of the US mobile phones industry with devices priced between 550 and 630 USD. As a result, OnePlus is competing directly against Samsung Electronics and Apple.
Lau affirmed that some Chinese brands are already selling models of their mobile phones through US carriers, but smartphones available through these channels are priced around 100 USD. It is not news that the mobile operators in the US depend on Chinese manufacturers to produce cheap handsets which they offer to low-end subscribers after branding with their logo.
It is true that many Chinese brands of smartphones had made their way into the US market in recent years, but these phones are mostly low-end brands. Models manufactured by Alcatel, Motorola, Lenovo, ZTE and TLC Corp are among the cheap phones sold in the US.
Lau said that the OnePlus brand had to pass through a strict certification process before making the entry into the US market. This development proves that the five-year-old brand has an excellent awareness of the market requirements and also serves as a boost to the morale of the entire smartphone industry of China.
Bryan Ma who is the vice president of client devices research at IDC stated that the niche that OnePlus targets are consists of mobile phone enthusiasts, but the market leaders in the US are AT&T and Verizon who has the bulk of Apple and Samsung loyalists on their network. However, Bryan concluded that the development has given OnePlus extensive publicity which is an excellent way of providing a good perception about Chinese phones in the US.
Earlier this year, AT&T, one of the leading US carriers abandoned its distribution deal with Huawei technologies over national security issues. A similar agreement with Huawei was also aborted by Verizon. As a result of the unfortunate deals, the dream of Huawei (the largest smartphone brand in China) to become a major player in the US telecom industry was dashed. In the United State, 90% of handsets are sold through telecom carriers. Huawei said that its recent flagship Mate 20 smartphone will not be available in the US. Although the brand is being sold in Asia and Europe where it competes favorably against other Chinese brands.
In an interview with a Chinese magazine, Lau made an interesting point that unlike Huawei and other Chines brands, there is a high demand for OnePlus brand of phones in the US. Analytics data from OnePlus shows that the US buyers mainly sourced the product through Amazon.com, Facebook and Google.
While announcing the exclusive deal with OnePlus, John Legere who is the CEO of T-Mobile affirmed that there is a high demand for the OnePlus brand from their subscribers. He said that about 200,000 subscribers had registered OnePlus phone brands on their network before the company made the deal to sell the devices.
OnePlus was established in 2013 in China, but one cannot really refer to it as a Chinese smartphone brand because about 70% of its sales are grossed outside the China mainland. The largest buyers of the brand are from US, Europe, and India.
Lau, the founder of OnePlus, was the vice-president of the Chinese Oppo smartphone brand before establishing OnePlus. Oppo still holds a major stake in OnePlus.
Before the consummation of the T-Mobile distribution deal, OnePlus assumed leadership among smartphones that cost 400-600 USD which are sold without a contract with telecom carriers. Data from IDC published by OnePlus shows that the company holds 44% of the market share, closely followed by Motorola at 16.7%, and Apple at 10.9%.
However, OnePlus still has many hurdles to cross to be on par with major players such as Huawei, Xiaomi, Oppo, and Vivo. Data from Counterpoint Research showed that OnePlus did not make the top 10 list of the global smartphone shipments. The leaders are Samsung, Huawei, and Apple.Source