OnePlus Has a Problem. A Pricing Problem (Premium)

I’ve always been a fan of OnePlus, which is as much an ideal as it is a growing family of smartphones. The company has always promoted its community and feedback-driven culture. And more practically, that it delivers flagship-class components at much lower prices than the market leaders. This is an important role, one that Google used to play with its Nexus handsets. But like Google, OnePlus has given up on that part of its identity. The OnePlus 8 and OnePlus 8 Pro—which, yes, look excellent—are just as expensive as other flagships.

This is troubling. But to be fair, OnePlus has been moving in this direction for years.

In early 2017, I purchased my first OnePlus handset, the OnePlus 3T. That handset started at just $439, but I upgraded the storage from 64 GB to 128 GB and paid just $479. This was at a time when the Samsung and Apple flagships cost $750 to $1000.

In mid-2017, OnePlus released the OnePlus 5, with upgraded innards and slightly higher prices: That $479 price point was now the entry-level, and an upgraded version would set you back $539.

The OnePlus 5T arrived in late 2017, and I declared that it was basically a no-brainer, in part because its price–$499 to start, or $559 for an upgraded version—was roughly half the price of a Google Pixel 2 XL. Here, again, the prices were up model-over-model, but only slightly.

In 2018, OnePlus released the OnePlus 6 in the first half of the year and again bumped up the prices a bit: $529 to start, $579 for a mid-level model, and $629 for a high-end configuration. Granted, a new Galaxy S9+ started at $840, whereas an iPhone X would set you back $999. But OnePlus was creeping ever closer.

The creeping continued in late 2018 with the OnePlus 6T, which started at $549 and rose to $579 and then $629 for higher-end versions; the cheapest Pixel 3 XL cost $899, while the iPhone XR started at $749. And there you see the first signs of trouble: Apple, of all companies, was finally offering less expensive new iPhones at lower prices.

But 2019 is where things got really weird. The OnePlus 7 Pro jumped so far in pricing—starting at $669, a $120 price bump over its predecessor—that OnePlus basically kept the 6T around as the OnePlus 7 in some markets. Granted, a comparable iPhone XS Max started at $1100, while a Google Pixel 3 XL or Samsung S10+ started at $900.

And then the OnePlus 7T happened. This wonderful handset brought the price back down to $599, but it wasn’t a replacement for the 7 Pro; instead, it was a kind of alternative flagship, paving the way for this week’s OnePlus 8 series launch, in which the first would announce two handsets together.

Until yesterday, then, OnePlus offered two smartphones: A OnePlus 7T that started at $599 and a OnePlus 7 Pro that started at $669 and could sell for as much as $749. (There are/were other OnePlus models, including some specialty variants and older models, but you get the idea.)

With the OnePlus 8 series, we again have two models. But now the entry-level—a base OnePlus 8 model—is $669, while the OnePlus 8 Pro starts at an incredible $899. That is $220 (!) higher than the starting price of its predecessor.

How can OnePlus justify such prices? I think there are two reasons.

First, the market leaders—Samsung and Apple—have been raising the prices on their flagships as well. The Samsung Galaxy S20 lineup starts at $999 and quickly escalates beyond $1499, depending on which model you get. (But yes, it offers big discounts and trade-in values too.) And while the lesser iPhone 11 starts at $699, the iPhone 11 Pro starts at $999 and the iPhone 11 Pro Max starts at $1099.

Second, OnePlus has finally stopped being fickle about certain things, certain expensive things, that it never did before. It got an official IP rating, on the OnePlus 8 Pro only, having previously cited cost as the obstacle in the past. It added wireless charging capabilities, finally. And it is fully embracing 5G networking, and even Verizon/CDMA compatibility for the first time. These things all cost money. In some cases, a lot of money. And OnePlus is passing those costs along to the consumer.

Is this defensible? I suspect that OnePlus will argue that its feedback-driven culture is what led to these improvements and the resulting cost increases. And that, in short, it only doing what its customers demanded, in some cases after years of resisting.

But there are problems with raising prices at this time, especially for a company like OnePlus, which doesn’t have the mass market exposure or reputation of the market leaders. The COVID-19 crisis has triggered a worldwide rethinking about what’s important, and the case for $1000 smartphone—-OK, a $899 to $999 smartphone—is harder to make.

Worse, there are excellent mid-range handsets, with more to come. Apple, this very week, will introduce a new iPhone SE that will cost as little as $350, and while its display and exterior are a bit old-school, its innards are all modern and the device will be feature-proof. And Google is set to announce a Pixel 4a sometime soon; this will be more expensive than the iPhone SE but still affordable. And there are many other mid-range choices, from various Motorola handsets to the Samsung A series.

Yes, I know that these phones are not technically in the same class as the new OnePlus handsets. But OnePlus doesn’t offer choices in that part of the market. It has priced itself right out of there, thanks to a $669 starting price on its cheapest new model. That’s going to be a tough sell, no matter how good the phone is.

I wish OnePlus well: I respect this company and its ideals, and its recent handsets have been mostly excellent and easy to recommend. But I’m concerned that it has priced itself out of the sweet spot, a problem that has dogged Google’s Pixel handsets as well. That is not the product line that OnePlus should be emulating: Maybe the firm should consider settling a bit.