OnePlus CEO Peter Lau had confessed how they've been able to bring high-end features with Nexus-like pricing in the OnePlus One smartphone. According to Lau, the company is able to offer its flagship OnePlus One at an affordable price because they are doing so "at cost."
"We are selling the phone at cost," Lau told tech publication Tech Radar. "We are able to do that by redistributing our costs to better benefit the user."
It's unclear how OnePlus will be able to be sustainable selling the device at cost, foregoing profit margins. Though Google utilizes the same strategy with its Nexus phones that ship with flagship specs, Google is able to generate money after device sales have been made through revenue sharing agreements of apps and digital content through the Play Store.
"Rather than put money towards a large marketing budget, we are focusing on online marketing and community interaction," he said. "Rather than working with retail partners, we rely on selling the device online."
The OnePlus strategy is radically different than that pursued by many of its rivals. Samsung, for one, has a huge marketing budget for its Galaxy line that's rivaled mainly by Apple, and Lau was quick to point out that his company is focused more on a grassroots campaign to save costs and pass those savings on to consumers.
Source: Tech Radar