OnePlus sells 500,000 phones, makes almost no profit on each one

By Andy Boxall November 7, 2014

Oneplus One Press

Smartphone newcomer OnePlus has revealed it has sold 500,000 devices since it launched the OnePlus One during the summer. The phone made quite an impact when it arrived, thanks to its high specs and low-end price. The Snapdragon 801-powered, 5-inch full HD phone is yours for just $300, if you choose the most basic model. Unsurprisingly, OnePlus isn’t making a huge amount of money of the One, telling forbes.com the profit is a “single-figure dollar amount.”

The razor-thin profit margin partly explains the difficulty with which buyers have had trying to obtain a OnePlus One. Sold primarily through an invitation based pre-order system, it angered almost as many people as it pleased, and despite saying it would be opening up orders on a particular date, it did so only for a matter of hours. OnePlus needs to sell each phone it produces when it makes such a small amount on each one, hence the lack of continuous stock.

According to Carl Pei, co-founder of OnePlus, making more money is on the company’s agenda. The bargain One has done a good job of getting it noticed, and is establishing a growing user base. “The main shift.” he said, talking about how the firm intends to make money in the future, “will come when we have a few million users and start leveraging the user base.” He talks about using software, services, and accessories for monetization.

This is something we’ve seen OnePlus toy with already, having signed a deal with JBL to produce OnePlus-branded headphones, sold through its own online store to complement the One smartphone. It also sells various replacement rear panels for the device.

During a recent Reddit AMA session, Pei also discussed plans for the OnePlus Two, a sequel to the One expected to launch in mid-2015. It’s likely to be another reasonably priced phone – essential if OnePlus wants to build a large userbase in order to sell add-on services and products – due to Pei confirming a similar invitation system will be used to sell the phone. OnePlus is targeting a million sales of the One by the end of the year, therefore we should start to see some of its ideas for making money outside of phones before the arrival of the OnePlus Two.

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Andy is a Senior Writer at Digital Trends, where he concentrates on mobile technology, a subject he has written about for…

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