When OnePlus announced the OnePlus 5, the newest handset from a company that has become synonymous with value for money among smartphone enthusiasts, there was some real sticker shock. The phone starts at $479, making it $30 more expensive than the OnePlus 3T, and $80 more expensive than the base OnePlus 3. The OnePlus 3 was, in turn, $70 more expensive than the OnePlus 2, which was $30 more expensive than the original OnePlus One.
To take things end to end, the original OnePlus One 64GB retailed for $349 when it was announced in 2014. Today, the 64GB OnePlus 5 costs $479, a price creep of nearly 40% over the years if you compare along the same storage capacity. But most high-end smartphones really haven't budged much in that time. That is, until this year: The Galaxy S8 and S8+ finally pushed Samsung into a double-digit price hike across the board when they launched this Spring. Samsung hasn't had any trouble selling them, either, and it seems inevitable that other manufacturers will probably follow suit now that the way has been cleared for higher MSRPs. There's no doubt these premium tier price hikes will have an effect downmarket, as well.
The middle is falling out
While there certainly are $250-400 phones out there, they are becoming increasingly rare. One such example, Motorola's excellent 5th-generation G series, can be configured up to $300 with 64GB of storage and 4GB of RAM. Do you remember when the Moto G was a budget phone? That moniker hardly seems fitting anymore. Instead, the once so-cheap-it's-basically-disposable Moto E series has taken up the G's role in the Moto portfolio, with the new E4 Plus starting at $179 - the same price as the original Moto G.
In many ways, the $379 Nexus 5X was the end of an era for Google-branded smartphones
Google's Nexuses were perhaps the most well-known mid-range smartphones in America, beginning with the Nexus 4 in 2012 (previous Nexuses were pricier) and ending with the Nexus 5X and 6P in 2015. Google replaced them last year with its far pricier Pixel phones, much to the chagrin of longtime Nexus fans, eliminating another player in the segment. Other phones in this price bracket like the ZTE Axon 7 ($400), Huawei Honor 8 ($400), and LeEco's short-lived LePro 3 ($400) haven't seen major sales traction. All had their notable compromises, and none have had successors announced for the US. And I think that's largely because the kind of buyer looking at a four-hundred-dollar-plus smartphone is getting more demanding - and is willing to pay to satisfy those demands.
The $399 Honor 8 was a beautiful, capable smartphone that basically nobody in the US bought.
OnePlus has been an excellent case in point. Every year, it seems that OnePlus has been criticized for leaving one thing or another out of its phones, or neglecting to make something a focus. With the OnePlus 3 and 3T, OnePlus probably took more flak over camera performance than anything else, as the phone was largely great otherwise. So, what did OnePlus do with the OnePlus 5? Put in a costlier dual camera module, of course. The staid design of the OnePlus 3 and 3T with its large camera hump also received occasional grumbles. The OnePlus 5, despite looking a bit iPhone-y for it, puts those complaints to rest - this now looks like a "premium" phone. These changes have associated costs, and OnePlus is passing that cost on to fans who were once deemed the most price-sensitive of smartphone buyers, for whom a $600+ phone was simply unthinkable. Given a 128GB OnePlus 5 is getting rather close to that $600 mark, I have to wonder: what's changed?
We want more, and we'll pay more
When we're talking about something cresting that $400 mark, most people don't actually want a smartphone that feels compromised. They want the experience of a "true" high-end phone. And getting 90% of the way there for 60% of the money is still a very attractive proposition. The OnePlus 5 doesn't have a curved QHD Super AMOLED display panel, great post-purchase support, or compatibility with the US's CDMA networks. That's at least in part because these things would all materially affect the cost of the OnePlus 5, be it through the bill of materials, manpower, or licensing and certification fees. OnePlus has, I believe, discovered that its customers are not so much interested in what OnePlus can go without on a phone to keep its cost low, but what it can add to a phone to get it that much closer to a premium smartphone experience, even if those additions come at a price.
After all, the 64GB OnePlus 5 still very substantially undercuts the Galaxy S8 even when the latter is deeply discounted, and the OP5 easily represents the closest OnePlus has gotten to a proper high-end smartphone experience.
One of OnePlus' premium gambles on the OP5 - dual cameras - really didn't seem to pay off, unfortunately
As usual, it has been said that OnePlus still hasn't done enough. There's no water-resistance, the cameras really aren't great, and absent CDMA support is more noticeable when even budget phones like the Moto E manage four-carrier compatibility in the US. And that leaves us with a question: can OnePlus remedy these shortfalls in the OnePlus 6 without raising the price of its phone yet again?
A phone can be fairly priced at $300, and it can be fairly priced at $500 - but which product will leave the customer feeling less like they've settled?
Realistically, I think we're beginning to push up against the boundaries of what can be achieved for under $500 without cutting yet more corners. Waterproofing might be doable, but would fans be willing to settle for anything less than the best chipset Qualcomm offers in the OnePlus 6? Of course not. Would they be willing to pay the same money for less RAM, even knowing 6-8GB is of dubious utility in a smartphone? I doubt it. How about going back to a single-lens camera system? It's hard not to see people saying OnePlus "cheaped out" by regressing on such a feature. In short, for every thing OnePlus adds, for every feature it improves, it becomes almost impossible for them to then decide to remove or de-emphasize that thing in the next generation of device. The price of OnePlus phones has gone up because fans have demanded more and more from the company with every subsequent release.
And this isn't just true of OnePlus, it's something every smartphone manufacturer must wrangle with.
Premium experience, semi-premium pricing
More storage, more RAM, better cameras, more LTE bands, better battery life, a more modern design - none of these things are without their costs. If we're going to continue to ask that smartphones provide us good value for money and the best feature set possible, it seems inevitable that prices will continue to creep upward. And with companies like Samsung, Google, and very likely Apple trying to raise the ceiling on the ultra-premium segment of the smartphone market, manufacturers focused on value (like OnePlus) will gain more price headroom to work with, as well.
So, sure, many people would like a $300-400 smartphone that focuses on what they deem most important, and leaves out what they don't - even if that entails what many people might deem significant compromises. The reality, however, increasingly seems to be that what most enthusiasts want is as few compromises as possible so long as the asking price seems "fair." After all, a phone can be fairly priced at $300, and it can be fairly priced at $500 - but which product is going to leave the customer feeling less like they've settled? That question answers itself, and phones like the OnePlus 5 exist as a result. Compromise is something we'd all prefer to do without, and most of us are probably willing to open our wallets a little wider to avoid it.