A lot of speculation has been going round as to how the OnePlus One can be sold so cheaply, well CEO Pete Lau has gone on the record to fill in the blanks.
Lau spoke with TechRadar in an interview and revealed that the OnePlus One is being sold to customers at cost price, meaning no profit is being made on the hardware at least for the time being.
We are selling the phone at cost. We are able to do that by redistributing our costs to better benefit the user. Rather than put money towards a large marketing budget, we are focusing on online marketing and community interaction. Rather than working with retail partners, we rely on selling the device online.
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In the past OnePlus had been adamant that the reason for the low-cost was due to the low costs of online marketing and not having retail chains to fund. However, as we mentioned in our How to buy a OnePlus One post, it is quite common for Chinese companies to sell their phones at cost and Xiaomi and Huawei have been doing this for some time and they manage this by attempting to work out the future costs of hardware so they can eventually being making a profit.
The OnePlus One is already being shipped out to the 100 winners of the “Smash the Past” promotion and more invites are scheduled to be released before the end of this month.