OPPO / OnePlus’ smartphone shipments dropped -18% YoY in Q4 2022. It is the fifth quarter in a row that the vendor posted annual decline. With 9% market share, OPPO / OnePlus maintained the fourth position in global smartphone market, after Apple, Samsung, and Xiaomi.
Amid the strong headwinds, OnePlus made solid progress in brand repositioning this quarter. In November, at OnePlus’ 9-year anniversary event, the vendor announced the new target and the new strategy for OnePlus brand. There are three points worth pay attention:
- Scale growth is the top priority for OnePlus, instead of profitability. OnePlus’s target in China is to be the number 1 online player in RMB 2000+ (USD 293+) price tier (retail) within 3 years.
- To achieve the goal, OnePlus has received internal approval on 0% hardware margin in the next three years, which is more aggressive Xiaomi’s 5% profit target. This suggests that we will see more aggressively priced products launched by OnePlus in the upcoming quarters, especially in the high-end segment (USD 191-299, wholesale).
- To ensure the financially sustainability, OPPO is going to allocate RMB 10 billion (~USD 1.5 billion) total budget to OnePlus in the next three years mainly for research development. OPPO is betting on the online segment and OnePlus brand to be the new growth driver.
After the renewed brand strategy, OnePlus accelerate its product launch rhymes in 2023 and has launched two sets of new products in the first quarter: the new OnePlus 11 series for premium segment and new OnePlus Ace 2 / 11R for high-end segment, in both China market and overseas markets. The Number series comes with the latest hardware innovation from the industry and differentiates via imaging story. The new Ace / Number R series, on the other hand, competes via gaming experience and bundles with top-rated mainstream hardware specifications. With the strengthened product portfolio, OnePlus brand’s shipments in Q1 2023 is likely to rebound.
We consider the repositioning is overall a good thing for OnePlus brand. With the clarified strategic priority, the aligned pricing strategy, and the committed resource from OPPO, OnePlus is much better positioned to grow in China in 2023 compared with 2022.
However, to fully achieve its target – top China online market above RMB 2000 within three years, OnePlus needs to fight extremely hard against local Android vendors including Xiaomi, vivo, and Honor. Meanwhile, the vendor needs to carefully manage the cannibalization risk and minimize the negative effect on OnePlus’ brand equity while penetrating down to lower price tiers.
Our latest report Q4 ’22: OPPO: OnePlus Brand in Transition was published. WSS clients could access the full report via this link.
Meanwhile, we have employed SA Lens to evaluate vendors and compare them with their peers. Below is the evaluation on OPPO’s performance in Q4 2022.
