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Economics of OnePlus
EXCERPTS
PRICING STRATEGY OF ONEPLUS
OnePlus offered devices with an industry leading design, superior build quality, and top-of-the-line specifications at a disruptive price. The phones’ pricing appealed to those seeking a high-end device without having to spend too much on it. According to some industry observers, OnePlus kept its pricing strategy very competitive and was not worried about costs while manufacturing devices. After adding up all the costs, the start-up retained a small margin for itself in order to keep its operations running and passed on the rest of the savings to the customer in the form of low prices, they added. OnePlus set the lowest feasible price for its devices in each geographical market. The prices of OnePlus devices were different in each country depending on operating costs, taxes, and other factors... . |
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CHALLENGES
According to analysts, OnePlus faced tough competition in the domestic as well as global smartphone market. Many Chinese smartphone manufacturers such as Xiaomi Inc. , Huawei Technologies Co., Ltd , and ZTE were offering Android phones with premium features at budgeted prices similar to those of OnePlus. The most notable device in its price range was the Nexus 5 from Google, which was available for US$349 and came with specifications similar to those of the OnePlus devices....
THE ROAD AHEAD
In the first nine months of 2015, OnePlus reportedly sold about 1.3 million units worldwide with 57% of the sales coming from the Asia Pacific region. It planned to sell 5-7 million smartphones in 2016...
EXHIBITS
Exhibit I:Specifications of OnePlus Products
Exhibit II:Pricing of OnePlus Products in Some Key Markets* (As of 2015)
Exhibit III:Top Ten Smartphone Vendors Based on Market Share
Exhibit IV: Global Smartphone Shipments Forecast from 2010 to 2019 (in million units)
