Carl Pei, Co-founder of OnePlus, talks about his India plans, Cyanogen's shocking announcement and more

We had a freewheeling chat with Carl Pei, Co-founder and Director of Global, OnePlus, on the eve of the OnePlus One launch.

OnePlus launched its flagship device on Dec 2nd in an exclusive partnership with Amazon and at an impressive pricing of Rs 21,999. We have already reviewed the phone and we were quite impressed with the overall performance. While the phone was launched in China in April and has been selling across the world since, India got an official launch just this week. But OnePlus made some India specific announcements such as physical service centres across 20 cities, having an R&D centre in Bangalore and the fact that India would be a global launch partner for all future OnePlus devices.

Post the launch event, we got a chance to speak to Carl Pei, Co-founder and Director of Global, for OnePlus. We spoke about everything from Cyanogen Inc.'s sudden exclusive partner plans, the invite system of OnePlus, its India plans and so on. So let us start off with the question that was second in importance after the price of the OnePlus One.

Carl Pei, Co-founder and Director of Global, OnePlus

Carl Pei, Co-founder and Director of Global, OnePlus

Cyanogen announced an exclusive partnership with Micromax for India, barring future support for Cyanogen OS on other devices. Were you aware of this beforehand or did it come to you as a rude shock?

We got notified about Cyanogen’s exclusive India partnership six days ago, on Nov 26th. It was quite sudden and we were not given any reason for this decision. Outside India, OnePlus is still on very good terms with Cyanogen. In fact only last night I received a mail thread from Cyanogen, where we were discussing about the Lollipop updates (on Cyanogen Mod) for the handset,

Will these updates be only for users outside of India?

We do not know how Cyanogen plans to segregate the updates based on regions. OnePlus is still to discuss the practicalities of the future CM updates on its handsets with Cyanogen.

So will the phones selling in India come with the Cyanogen branding, considering it will still be shipping with Cyanogen OS?

Yes, they will be shipping with Cyanogen branding on the rear side. By the time we got the notification from Cyanogen about their exclusive India partnership, we had already shipped the handsets for the India launch.

Could you tell us something about your custom ROM plans?

Yes, we are working on our own custom ROM. We are releasing a community build. So users who are interested can download it and flash it. We want to get an idea about the bugs in our custom ROM from the users so we are ready for a stable launch soon. We are expecting a stable release towards end of February 2015. It will start with Android 5.0 Lollipop OS.

In China, OnePlus devices come with ColorOS. After you come out with your own custom ROM, what is the future of ColorOS on OnePlus One?

When we develop our own ROM, we will stop using ColorOS and use our own ROM.

The OnePlus One 64GB has a 13MP rear camera with dual-LED flash unit

The OnePlus One 64GB has a 13MP rear camera with dual-LED flash unit

Could you tell us something about the after sales services as India has a local partner for this purpose?

India is the first country to have service centres with actual physical presence. We have partnered with HCL and we will start off with 25 service centres in 20 cities all over the country and we are looking to expand that number as we grow the business here.

Any plans on manufacturing / assembling devices here in India now that the government has announced a ‘Make in India’ initiative to attract companies to make products in India.

When we establish better relationship with the government we will explore the opportunity. Right now we have been working hard just to get the launch to happen, so we want to concentrate on establishing our business here. These things (assembling in India) are definitely possibilities, but I cannot give you a clarity right now.

You had mentioned that you will be working on a smartwatch next year. Is that a certainty? Also there were leaks recently of a product called OneWatch. Any comments?

Well we would certainly consider a smartwatch next year. About the OneWatch, I don’t have any comments.

When will OnePlus Two be launched?

We will announce it between Q2 and Q3. One of the main differences this time is that we are a global first company and India is one of our most important global markets. So Indian users will not have to wait a lot for the OnePlus Two. India will be one of the first launch markets.

How do you manage to keep the selling price so low? Considering the product is being sold almost at cost, what is your business model as the profit margins are quite slim.

Our thought process is very similar to that of software companies in the Silicon Valley. Make a good product, get a good product market set and get the users. Once you have the users, you can find out ways to monetise that, you don’t have to worry about that at the start.

In the future will you continue with the invite-only system or are you planning to get into online-sales model like the e-commerce sites or pre-order model?

As soon as we feel that we have a good understanding of the market, we are going to shift to a pre-order model. The invite system helps us to scale up. It gives us an idea of the demand. In India we are working with an external service provide for the first time, so we will have to figure things out. If we feel we have a better grasp over the sales situation, then we will make more phones available. It is a way of not over extending ourselves. Also the good thing about an invite is that you don’t have to worry about the product, if you have accepted the invite, we have a product ready for you to be shipped. The idea behind having the 48-hour deadlines for the the invites is so that if you do not use your invite, the invite can pass on to the next person in line.

Could you tell us how OnePlus's weekly/monthly manufacturing cycle works. Do you give out number of invites based on your production capacity or does the capacity change dynamically based on the number of invites that have been used?

Because of our thin margins, excess inventory represents a big risk for us. First we have our production that we try or best to manage as efficiently as possible. The main challenge here is that the lead time is more than three months. Once the products are in stock, we try and send as many invites needed to clear the stock and minimize inventory holding time. We track conversion data and adjust or numbers on a daily basis.

OnePlus One comes with Snapdragon 801 SoC, 2GB of RAM and 64GB storage

OnePlus One comes with Snapdragon 801 SoC, 2GB of RAM and 64GB storage

Any reason behind not releasing the 16GB version in India? You could have easily sold another variant under 20k

We have seen that for the global market, users prefer the 64GB model. That’s why we launched it here first. We are not looking to launch a cheap phone. But we will see the response. If people here want the white 16GB version, then we will think about announcing it.

Is your R&D team based out of China only? The India head announced that OnePlus will setup an office in Bangalore, will that be another R&D centre?

We have a Shenzen and a Bangalore R&D team. Both the teams work on hardware and software development. The India team will also try and understand the local needs so that we can try and cater to those needs.

So the OnePlus One launched in China in April, and OnePlus Two will launch in the next 6-7 months. Do you feel that within this timeframe, the sales in India will surpass China?

I think India will surpass China in terms of sales next year. This year we launched in India towards the end, so we will never surpass China sales numbers. But normally if you see a product life-cycle, it is a bell shaped curve. You reach the peak and after that there is a tapering of the slope which signals the end of the product cycle. With the OnePlus One, we are somewhere in the middle of the slope and yet to reach the peak. So we decided to extend the life cycle for another few months.

Somewhere in the future or say after the OnePlus Two launch, do you still plan to stick to one flagship product only or increase the number of products per generation?

We will enrich our product lines with one or two new product lines. So apart from the flagship (for instanceOnePlus One) line, there will also be another differentiating line. We are also looking other categories of products but we haven’t finalised on any as of now. We are looking at fitness trackers and smartwatches but we are still trying to figure out how these products can add more value.

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