Cheap Chinese Smartphones – OnePlus, the first Chinese smartphone company to sell premium models through major US telecom operators, hopes to eventually destroy people’s general perception that China’s domestic brands are only good for low-cost and low-quality handsets.
“Selling OnePlus 6T through US operators is very important because it will help build trust in the Chinese brand, which is something we should be proud of,” Pete Lau, founder and chief executive of OnePlus, said at a company event in Shenzhen on Monday.
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OnePlus and T-Mobile jointly announced last month an exclusive pact that has provided the company’s flagship OnePlus 6T model in more than 5,600 stores from the third largest cellular network operator in the US.
Lau said that the agreement marks the first time a Chinese smartphone company has entered the US market premium segment for devices that cost between US $ 550 and US $ 630, which allows OnePlus to compete directly against Apple and Samsung Electronics.
“Some Chinese brands have sold through US operators, but consumers (who buy from US operators) only want to buy US $ 100 products, rather than looking for a particular brand,” he said.
For a long time, US cellular network operators relied on Chinese smartphone suppliers to provide cheap handsets, branded with their own operator brands, which were intended for their low-cost customers.
Although more smartphone brands from Chinese brands have seen extensive distribution in the US in recent years, this is mainly targeting the lower end of the market. This includes Motorola from Lenovo Group, Alcatel from TCL Corp and handsets made by ZTE Corp.
The entry of OnePlus’ success on the US market, described by Lau as having the most stringent certification process, shows not only healthy awareness for the five-year-old Chinese brand on the market, but also moral-enhancing development for the rest of China’s smartphone industry.
“OnePlus has traditionally targeted niche segments of fans, and T-Mobile is still overshadowed by giants like AT & T and Verizon in the US, so this step [in America] will not attract the masses of Apple and Samsung loyalists [to switch],” said Bryan Ma, vice president of client device research at IDC. “But this is the beginning of getting more awareness in the US than OnePlus before and in turn, against the perception there about poorly made Chinese smartphones.”
In January, US operator AT & T left the US smartphone distribution agreement with Huawei Technologies because of national security concerns. Later it was reported that Verizon Communications also canceled plans to distribute Huawei smartphones in the US.
It damaged Huawei’s plan, China’s biggest smartphone brand, to become a major player in the US market, where more than 90 percent of handsets are sold through operators. Huawei recently said its flagship smartphone, Mate 20, will not be distributed in the US, while other Chinese brands compete in other markets in Asia and Europe.
Unlike rivals Huawei and other Chinese brands, there is demand from consumers in the US for OnePlus smartphones. Lau said in an interview with the South China Morning Post in May that the record of e-commerce shipping companies showed that US buyers mostly came from three technology companies – Amazon.com, Facebook and Google.
“We have seen real demand for OnePlus smartphones at T-Mobile,” John Legere, operator’s chief executive, said in a statement last month to announce an exclusive distribution agreement with OnePlus. He said nearly 200,000 customers registered their OnePlus smartphone to T-Mobile before operators began selling this device.
Founded in 2013, OnePlus is a rare item among Chinese smart phone brands because it gets nearly 70 percent of its sales from outside the land, with the US, Europe and India among its largest markets.
Lau has worked as vice president of the Chinese smartphone brand, Oppo before he founded OnePlus at the end of 2013. Oppo remains a key stakeholder in OnePlus.
Before its T-Mobile distribution agreement, OnePlus became the No. 1 smartphone vendor in the open market range of US $ 400 to US $ 600 – sold without a telecom operator contract bundle – with a 44 percent market share, followed by Motorola at 16.7 percent and Apple at 10.9 percent, according to IDC research figures provided by OnePlus.
OnePlus, however, still has a lot of work ahead to become a large smartphone supplier with volumes such as Huawei, Xiaomi, Oppo and Vivo. In the latest quarterly ranking of global smartphone shipments, led by Samsung, Huawei and Apple, OnePlus doesn’t even break the top 10, according to data from Counterpoint Research.
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