The American smartphone industry is one of the most difficult to break into. Apple and Samsung have dominated the industry for a very long time, and any brand that gets there has to compete for the scraps they leave behind. It seemed entirely unprecedented that an enthusiast-focused Chinese startup would have a chance, but OnePlus took the US market by storm with the OnePlus One in 2014, cementing itself as a competitive force here to stay.
Fast forward to today, and little remains of what OnePlus originally was. Instead of only focusing on phones that offer flagship performance at mid-range prices, OnePlus now produces high-end devices priced similarly to flagships from Apple and Samsung, with the OnePlus 15 starting at $900. The company is also expanding its operations outside America and focusing on countries in Asia, although its initial popularity in the United States was a major part of its success.
Perhaps the most notable change concerns who owns the OnePlus brand. Despite calling itself an independent startup, OnePlus has always had Oppo backing it, as well as BBK Electronics, the parent company behind Oppo. Facing scrutiny in the global market for being a major Chinese conglomerate behind several successful smartphone brands, BBK Electronics delisted itself in 2023 and OnePlus was absorbed by Oppo as a sub-brand. Since then, OnePlus phones have become extremely similar to Oppo’s offerings.
OnePlus’ initial business model was unsustainable
OnePlus started as a budget brand aimed at enthusiasts who valued innovation and pure specs over brand appeal. As such, the OnePlus One used hardware that other similarly priced phones simply weren’t willing to use. It offered more RAM than Samsung’s and Apple’s flagships: 3GB versus 2GB for the Galaxy S5 and 1GB for the iPhone 6. Additionally, the phone featured the same Snapdragon 801 as the Samsung Galaxy S5, even though the S5 cost $649, more than double the OnePlus One’s $299. OnePlus also offered an incredibly good deal on storage upgrades for its first phone. You can get the 64GB version for $349, a $50 increase over the 16GB variant. For comparison, the 16GB iPhone 6 cost $649, and upgrading to 64GB meant paying $749, a $100 increase for the same amount of storage.
This meant that OnePlus was buying more expensive hardware and selling its devices at lower profit margins. It worked at first and got everyone talking about the brand. However, the business model wasn’t scalable: Enthusiasts and average buyers look for very different things in a new phone, and tech enthusiasts are a niche demographic to begin with. It is much more profitable to appeal to a wider audience. OnePlus had already managed to establish itself in the market, and its minimal profit margins could not support its expansion. As such, while the company still produces budget phones like the OnePlus 15R, it is now focusing on premium flagships and mainstream marketing.
How Nothing became OnePlus’ spiritual successor
Around the time OnePlus was moving into consumer devices, co-founder Carl Pei left the company in 2020 to launch Nothing. Pei was one of the main forces that brought OnePlus out of China and made it a notable brand in the Western market. Unsurprisingly, Nothing follows the same ideology that elevated OnePlus to its status in 2014: attracting early adopters and enthusiasts who appreciate something new. However, Nothing takes a different approach from OnePlus. It doesn’t try to cram as much powerful hardware as possible into its phones by cutting marketing costs and relying on sheer volume of sales and adoption to make up for its painfully low profit margins.
Instead, most of its appeal comes from its innovative design, bloat-free user interface, and additional aesthetic and quality-of-life features, all of which are much less expensive to implement than installing more powerful hardware. This leads to higher profit margins and a larger budget to allocate to marketing. This could make Nothing the first enthusiast-focused smartphone brand to survive without abandoning its identity, although it’s still too early to know for sure.
