OPINION

One Plus Two Equals Trouble for the iPhone

If you thought the iPhone was the most desirable phone in the market you wouldn’t be alone, but you likely would be wrong. While we all were snoozing, One Plus emerged. It’s a little company out of China that came up with and executed one of the most brilliant low-cost guerilla marketing programs I’ve ever seen.

The end result is that3.6M people currently are lined up — virtually — to buy its latest phone, the One Plus Two. To put that in perspective, that is more people than Apple sold phones to in the launch year of the iPhone, although people had waited in line to buy one of those things all over the world.

The One Plus Two is an Android phone, and its emergence came in the same period when HTC, one of the premier Android phone makers, watched its company value drop to below zero. So, how did a little Chinese company suddenly pop up outperforming companies like Samsung and Apple with a new smartphone? I’ll dig into that this week and close with my product of the week: the iRobot Scooba, a vastly improved personal robot that mops and dries your floor.

The iPhone Killer

The title “iPhone killer” has been overused — but in this case it is appropriate, because one of the campaigns at the One Plus One launch showed users of high-end phones like the iPhone destroying their phones on video in order to get the opportunity to get one of these rare new phones.

I don’t care what big-name company you want to come up with, but when have you heard before that any old or new smartphone company has convinced consumers to physically destroy their phones in order to get an opportunity to buy the one it’s offering? I can see trade-ins or rebates, though such promotions traditionally have worked poorly against the iPhone, but actually smashing their phones?

The One Plus One campaign was so incredibly successful, folks were destroying their phones even before it got off the ground. It wasn’t even a one-to-one deal — only the first hundred who smashed their phones got a chance to buy the new one for a buck.

Here is one of the videos — artistically done with nice background music — showing a perfectly good iPhone 5s being turned into a pancake. You can almost hear Siri screaming in the background.

On this iPhone 5 video, the death was far quicker and far less tortured or artistic — and it was done in Spanish! This one met its end with a sledge hammer. It seems like it was in Italy — those guys don’t mess around. Realize, these acts of destruction only got you a shot at the new phone.

This is seriously amazing. Would you destroy a working iPhone for a new Samsung, LG or HTC phone? I’ll bet not — but this new Android phone seems to be lighting the world — and I literally mean the world — on fire.

One Plus doesn’t seem to have much of a marketing budget. It is based in China, and Chinese companies traditionally have had huge problems selling outside their borders. Most people never even heard of the One Plus One. So what gives?

The Power of Exclusivity and Status

There is one big asset that Apple has given up over the years. It used to be that Apple products were relatively exclusive, but as Apple grew to dominate the smartphone market, it lost a good chunk of that cachet. Exclusivity means status. If you have something most everyone else seems to want and can’t get — that’s powerful status.

We saw that with the initial iPod, iPhone and iPad sales. In fact, the initial iPod sales were particularly interesting to watch. Apple not only sold an impressive number of those excessively costly devices in the first two months, but also took a record level of returns in the third month, when people discovered iPods didn’t work with their PCs.

It wasn’t until the second year that Apple added PC support — the initial wave only worked on Macs. Still, huge numbers of people didn’t even realize they were buying something that wouldn’t work with what they had; they wanted that thing that everyone seemed to want and couldn’t get. They wanted the iPod!

One Plus One offered, and now the One Plus Two offers, a similar promise — but they also offer a more affordable price, so that people aren’t financially held back from buying the phone. They promote the phone as a value — a very exclusive but very well-appointed iPhone replacement for a fraction of the cost.

You get an exclusive value. This isn’t easy to pull off, because if you have an aggressive price, people typically see you as a value product. Value products don’t carry the status to drive the behavior we are seeing, but because One Plus is restricting initial sales very well, the product is holding status nicely.

In fact, it’s likely scaring the crap out of Tim Cook, because it’s continued success could force Apple — eventually — to have to lower prices to compete. That would do nasty things to margins, and likely further reduce the iPhone’s declining ability to improve its buyer’s status.

Decent Phone Decent Experience

Of course, One Plus never would be able to sustain this if it didn’t have a decent phone and a couple of strong competitive angles — and being competitive is often difficult with a common platform like Android.

The phone actually feels more robust than an iPhone does. Remember Bendgate? That was a problem that occurred with the iPhone 6 because Apple used an aluminum frame.

It was a problem, because it made the screen the stiffest part of the phone and far more likely to crack. One Plus uses magnesium, which is equally light but far more rigid. It is brittle, but it requires far more force to break than aluminum does to bend.

You can customize the phone without destroying its look by replacing the back. On an iPhone you have to buy a case instead — and while it does make the phone more robust, it also destroys the phone’s lines and makes it look too much like other cased phones.

One Plus Two runs OxygenOS, which takes Android and makes it far prettier and more customizable, and a tad easier to use. Overall, though, the phone is hard to mistake for anything else, and that helps drive its exclusivity.

Arguably One Plus provide the best Android experience you can get on a phone currently in the market — that is, if you could get it. You can’t, because there are more than 3M people in front of you at the moment.

Wrapping Up: Lessons Learned

One Plus basically is making everyone in the smartphone business look foolish at the moment. A lot of the far-bigger companies have been complaining they can’t compete with Apple, while One Plus appears to be doing just fine against the firm — and far better than Samsung or HTC at the moment.

This is because One Plus has found the magical trifecta of exclusivity, attractive price, and compelling differentiated features to be the perfect toxic mix to offset Apple’s massive size and market dominance.

It is seriously making a lot of big companies that have been saying they can’t compete with Apple look pretty silly at the moment. I think the irony here is that One Plus is kind of doing what Apple did with the iPhone — that is, entering a segment where a lot of bigger firms were sitting fat, happy, and comfortable with the status quo, and then kicking the holy crap out of them. Now that’s fun, that is.

Rob Enderle's Product of the Week

My wife and I are big iRobot users, and we have bought a whole fleet of them over the years. However, with four pets, we left carpets behind some time ago which means we often run the iRobot and then follow up with hand mopping.

When the Scooba first came out, we bought one and were very disappointed. It was complex, not very reliable, and it didn’t do a particularly good job. Well, iRobot redesigned the thing, and I got the new Scooba 450 last week. The difference is night and day.

Its products still follow the old random bounce around the room methodology of cleaning, as opposed to the more intelligent and far more efficient method that smarter products like the Neato (which we also have) and the impressive forthcoming Dyson.

iRobot also has the Braava, from a firm they bought, which is basically a robotic microfiber dust mop. It actually works reasonably well, but it is good only for small rooms. You have to change and clean the mop frequently.

The Scooba is a full-on floor cleaner. It washes your floor, picks up the water, and then dries it. It’s a much better choice if you have pets.

iRobot Scooba 450

iRobot Scooba 450

It makes a bit of a racket, but it’ll handle a decent-sized room. While you likely should pick up your small rugs, it knows not to go over them and mess them up.

You do have to place it in the middle of the room, and it won’t autostart or autodock like other offerings, but you have to empty it and fill it with water after each room anyway, and until someone figures out how to get that to happen automatically, you have to carry it around.

While I’d like it to be a bit smarter and more organized in what it does, the overall quality is impressively high. It is very easy to use and clean, and I’ve been very pleased with the results — therefore, the new iRobot Scooba 450 is my product of the week.

Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends. You can connect with him on Google+.

2 Comments

  • Surely it’s Samsung and LG that should be nervous about this new strategy, they have the most to lose.

    Apple will happily continue to dominate the profit margins (93%) in the mobile industry. They will always have exclusivity with their iOS platform and their "walled garden" approach. None of this will be changing anytime soon. Tim Cook is unlikely to be phased by a company selling 3.6 million phones, when Apple sold 74 million of its phones in this last quarter alone.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

More by Rob Enderle
More in Tech Buzz

How often do you update your passwords?
Loading ... Loading ...

CRM Buyer Channels