The OnePlus One smartphone might be finding its stride, just in time for the holidays. Last week, current owners of the low-cost smartphone finally received a few invites to share with their friends and family (or with buyers at online trading sites).
Now, this still isn't a free-for-all to push high volume for OnePlus One sales. The company is still managing its supply and demand equation with a very careful hand.
For starters, this batch of sharable invites comes with an expiration date -- my own trio of invites is valid until Tuesday, Dec. 2. Furthermore, all invites are for a single specific variation of the handset -- the 64-gigabyte SandStone Black variety. Buyers in search of smaller storage with even lower prices or even just a white phone will still have to hold their horses.
So the OnePlus crew doles out limited numbers of its most popular model. It's unclear whether the recipients of these shared invite tickets will get their own sharable invites, which could start a viral invitation wave and quickly change the volume math. For that reason, I'm guessing that the new OnePlus One owners won't be endowed with invite opportunities, at least not right away.
The viral invite strategy is a tried-and-true approach -- when you want to start small and scale up interest very quickly. Google (GOOG 1.43%) (GOOGL 1.42%) perfected this tactic with Gmail a decade ago, and still uses it for new products like Google Inbox. Being an early adopter, I'm sitting on a few invites to that service as well.
But if I'm right, the OnePlus approach should be a bit different. This company isn't trying to drum up huge interest -- that's already in place. Instead, OnePlus is managing its ultra-tight product supply by keeping a stiff thumb on the nozzle of its supply hose.
Last month, OnePlus founder Carl Pei said that his company had shipped about 500,000 handsets, and was hoping to double that figure by the end of the year. Will this sharable invite promotion be the final push to reach that goal?
Look behind the smoke and mirrors
If you think OnePlus will drown in an avalanche of shared invites, let me assure you that many invites will go unused despite heavy demand on the handset buying side. For one, many OnePlus One owners can't, won't, or will plainly forget to share their invites. For another, receiving this golden ticket to low-cost, high-quality smartphone bliss is not at all the same as buying the phone.
Consider the case of the humble gift card. Theoretically just as good as cash in your pocket, an astonishing amount of purchased gift cards go unused. According to gift card sharing site Gift Card Granny, Americans spend about $30 billion on gift cards every year, mostly around the holidays. But more than $41 billion of gift card value went unclaimed and unused between 2005 and 2011, which amounts to about $7 billion a year. That's more than 20% of purchased gift card value going to waste -- or rather, becoming pure profit for the companies selling these cards.
Now take that 20% figure and modify it for the OnePlus One invite. Rather than free money, recipients are being asked to shell out $349 for a new smartphone, with no layaways or installment plans available. The sticker shock of far more expensive phones is often swept under the rug by chopping the sticker price up into manageable 24-month payment plans, and OnePlus doesn't do that.
And the invites have very short expiration dates. Buy now, or forever hold your peace. Many potential customers -- including those wishing and hoping for a OnePlus One invite -- will get cold feet as the invitation shows up in the middle of holiday shopping. Or maybe they decide that their old phones are good enough for now, or the invite gets picked up by an overly strict spam filter, or swamp gas from a weather balloon was trapped in a thermal pocket and reflected the light from Venus, and there's another invite going unused.
You get my point. The vast majority of these invites will not translate into OnePlus One handsets sold, especially since there are strict time limits on these invite tickets. This promotion may look like a massive volume booster, but is actually still a very tight trickle of expanded access.
So not much has changed, and OnePlus One will still be a very rare beast in 2014 -- and beyond. If you want one of these affordable handsets while they're available, be sure to ask a OnePlus One-wielding friend for an invite, muy pronto.
