Will the OnePlus 2 make more expensive Android phones obsolete?

OnePlus launched its '2016 Flagship Killer', the OnePlus 2 today morning in the form of a virtual reality recording from its headquarters. As the event started, Carl Pei went through the thought process behind OnePlus 2, talked about the importance of the OnePlus community and ultimately unveiled the features of the phone – 5.5-inch full HD display, OxygenOS based on Android 5.1 OS, finger-print sensor, USB Type-C port, 3300mAh battery, 13MP rear camera with Optical Image Stabilisation and Laser AutoFocus and more.

But the price point of the phone Rs 22,999 for the 16GB model and Rs 24,999 for the 64GB model, is what has got everyone asking the question, 'How do I get one?' So much so, that #OnePlus2 has been trending on Twitter since today morning. And unlike most international brands, India is one of the launch countries for OnePlus 2.

OnePlus One already had us convinced that you can get high end features at a sensible price point. Also, since the launch of Xiaomi Mi 3 last year, phone makers have been pushing the envelope when it comes to pricing. Xiaomi's flagship phone – the Mi 4 is now selling at Rs 17,999 and the OnePlus One is selling for Rs 21,998 (we do not know if the One will be discontinued from August 11 yet). Both these phones have specs which are top-of-the-line. Makes us wonder, are the bigger established brands fleecing us on price?

Fluctuating prices

One of the most common comeback from big brands is the fact that they come out with 'quality' flagships that have 'premium build quality' and 'the best' features – and that justifies the premium. But if that is the case, why does the price not remain constant for a considerable period of time? A look at any e-commerce websites for flagship phones will show a different (in most cases lower) price than the launch MRP. We understand depreciation, but at such quick rates?

Take the example of Samsung, it launched its flagship Galaxy S6 (64GB) at Rs 55,900, it is now selling for Rs 48,000 – within a span of four months. Even the LG G4 for that matter – launch price was Rs 51,000 for the 32GB variant, which is now down to Rs 46,000 within just a month of launch. HTC One M9+ 32GB variant was launched at Rs 52,500 in April – its current price is Rs 39,999. Need yet another example? Well, how about Sony Xperia Z3+ which was launched at Rs 55,990 for the 32GB variant earlier this month and is already selling for Rs 51,500 on e-commerce sites.

While price drops are a given in the Android eco-system, the iOS sporting Apple iPhones do manage to command high prices for phones launched even a generation ago. The iPhone 5s still sells for Rs 36,000 for the 16GB variant. Since there is no alternative in that space, we cannot really compare lest it become an apples and oranges comparison.

Sales model

Another common feedback from big brands is that their sales channels are different from the online flash-sale model of the Chinese brands. Distribution and marketing costs, and the multiple duties are another reason why the price is higher. But no one has stopped these brands from adopting a different approach, to cut down on the prices. In a country such as India, value for money is still the number one factor for majority of the consumers. Sure if you are getting an exceptionally good product, with exceptionally stand out features which demand the high price point – by all means the price is justified. A lot of you would even say that this is highly subjective, and it is. But if you are getting a similar specced phone which features good build quality at less than half the price – why would you want to pay such a high premium? We all are well aware that the life-cycle of a smartphone is under a year, before it gets outdated.

'But we have phones selling at affordable price points'

This is another oft repeated platitude. Sure companies such as Samsung, LG, Sony, HTC have phone across a price range, but that is not the point. Flagship phones certainly should command a high price point, but shouldn't there be a ceiling? Till Xiaomi and OnePlus started selling their phones at cost price, most of us were under the assumption that the big companies are justified in their pricing given their 'brand value'. But if the last one year is any indicator – that myth has been busted and how! The definition of affordable price point with regards to features differs with every brand.

Big corporations – multiple manufacturing interests – more incentives

Samsung, LG, Sony are huge corporations which not only make phones but a host of other product categories. But let us stick to the smartphone category. Each of the companies mentioned has an advantage over other smartphone makers – Samsung makes display, memory, chipsets; LG makes displays; Sony is the leader when it comes to smartphone camera sensors. Other phone makers have to pay these companies for the said parts. All the more reason for these brands to cut down on their flagship prices. But over the years we have just seen their flagship price points scale more peaks.

Sony is a market leader when it comes to smartphone camera sensors

These factors surely make one ponder over the pricing factor. Before its launch, OnePlus 2 price was being rumoured to be in the $450 region and there was even a listing on Oppomart at Rs 31,700, which we thought still made a lot of sense over the Rs 50,000 plus price point that most flagships launch at. OnePlus proved us wrong by launching the phone at Rs 24,999 for the 64GB variant with new features.

Will this get the bigger brands out of their slumber when it comes to their flagship smartphone pricing strategies? Or will we continue to see base models of flagship Android phones going over Rs 60,000 in the next round of launches?

Just look at the chart above and the prices. Do you still feel that the launch prices over Rs 50,000 are justified?

Let us know in the comments section.

Tags: OnePlus 2, OnePlus 2 launch, OnePlus 2 price India, OnePlus 2 vs LG G4, OnePlus 2 vs Samsung Galaxy S6, OnePlus 2 vs Sony Xperia Z3+

Source: Will the OnePlus 2 make more expensive Android phones obsolete?