OnePlus Founder: We're Making Ones As Fast As We Can

There may never be enough OnePlus Ones.

The OnePlus One is the hottest, cult smartphone out there, in part because it's extremely difficult to buy. It costs only $299 but has the features and design of a $650 flagship, with some extra geek-button-pushing features like Cyanogenmod's Android software thrown in to get the enthusiasts extra enthused.

We gave it a glowing review and an Editors' Choice, which we later had to pull because any phone we recommend must be available for actual purchase in the U.S. That's the thing about the OnePlus One: it's so back-ordered, it's only available by limited invitation and occasional, flash pre-sales. (We'll be offering up some invites on Twitter next week.)

OnePlus founder Carl Pei (who is Swedish-Chinese and speaks English with an American accent) came into our offices to emphasize that while there never seem to be enough OnePlus Ones, they're a real thing.

"We set some goals for this year. Thirty thousand was a realistic goal, 50,000 was a pretty good goal and 100,000 was a stretch goal," he said. "We now aim to ship a million devices this year, and we've already surpassed half a million."

The problem is that OnePlus has no idea how to predict demand for its hot phone. Because it makes so little money on each phone, it doesn't want to make more than it can sell. And it takes three months to request changes in volume from the company's screen manufacturer.

The OnePlus One hasn't followed the typical rules of phone demand, Pei said. Typically, when a phone launches, there's strong demand for about two months and then it starts tapering off. But nobody's been able to match the OnePlus One's price/performance balance, so demand for the phone has just been building with time.

"Sooner or later, it's going to stop, and we don't want to be caught with too much inventory. With no margins, we can't have a situation where we have too many units and we'll have to discount them. For us, the first year was about survival. We understand it's been really hard to buy," Pei said.

Phones Without Profits
There's a lot that's very Silicon Valley about the Shenzhen-based OnePlus. For one thing, it's scaling up very fast - from three to 50 people on the global team this year. For another, it seems totally uninterested in making a profit yet.

"Today you can operate a hardware company that isn't much different from how a software company is run in Silicon Valley. Facebook and Twitter didn't really know how they would make money either. If we can manage to build a big user base, we can find ways of monetizing through software and services," he said, suggesting a theme store as one of the initial ways of making money off OnePlus phones.

This isn't a totally crazy idea; it's becoming almost mainstream in China right now. Xiaomi and Meizu, the two big up-and-coming Chinese smartphone brands, both have app stores and theme stores as big parts of their profit plan. The difference between their strategy and OnePlus's, of course, is that OnePlus operates outside China, where Google's Play Store dominates the app sales landscape.

"Maybe we can create services which operate within the Google framework," Pei speculated. "The selling of themes, we have on our current phone but it's operated via Cyanogen. Since we launched the One, their sales have skyrocketed," he said.

OnePlus also has much lower costs than other smartphone makers because it sells only online, not through retail, and spends pretty much zero on marketing. That lets the company bring more value directly to consumers, Pei said.

"At the end of the day, despite the fact that it's pretty hard to buy, we think we're a positive force in the market," he said.

What's Next: The OnePlus Two
The OnePlus One will remain on sale next year, but it'll be joined by another model: the OnePlus Two. While the OnePlus One will stay around $299, the OnePlus Two will be made from higher-quality materials and cost a little more, Pei said.

Just like the OnePlus One's design came in part from suggestions on the company's forums, OnePlus will look for input early next year on what to include in the OnePlus Two. This will be a very different experience for the company, though, because instead of having 5,000 forum members, it now has 400,000.

"The announcement will be in late Q2 or early Q3 next year," he said.