OnePlus Nord Reveal! Smartphones

the ideal budget smartphone formula and how much different parts costs relative to the final cost of the phone and in that video I actually asked I called out if any companies want to get in touch with me and maybe give us the actual numbers of what some of these parts actually costs well it would be great well 1 plus as you probably already know by now is working on and has been teasing their upcoming mid-range or budget phone and they actually reached out and they said hey ok we are willing to talk about that kind of stuff and we can use project nor it as like an example to walk through that discussion so I said ok and what followed with some of the most interesting informative discussion I've had in

the smartphone world in a long time so I'm speaking with Carl Pei one of the cofounders of oneplus one of the guys usually see on stage at their events presenting stuff and there's a full uncut version of this entire discussion on the way form podcast I'll link it below we got really in the weeds about product strategy and the not so linear nature about how products are planned and how they come to life in 2020 but if you want to hear all that you can but this here is me cherry-picking some of the really good stuff we get actual numbers and prices via real discussions and we got a design reveal of oneplus Nord as promised enjoy do that all right Carl thank you for joining me so I think we're all we're here because you get you guys are you're working on 

a new product line oneplus Nord I think all we really know about it as of right now as we're recording this is the name is Nord and then there's all sorts of speculation about what exactly it is so why don't we just go right into it and just just tell me what you can about 

what oneplus Nord is what you've been working on what we should know now so if you look at the the timing now and if you look at the industry as a whole most smartphone companies they really focus all their time and energy into creating a great flagship phone the mid-range category is it's it's kind of an afterthought so the the best and brightest go and make the flagship phone and you know the mid-range it is what it is for us we think we're ready now because the technology is ready with the seven six five G chipset from Qualcomm we finally feel like the the mid-range chipset are ready to deliver the experience that people have come to expect from a oneplus product over the past couple of years you know we've been really focused on creating a fast and smooth experience and prior to this this was done on the 800 series yeah but now as technology is improving we feel like it's finally time and the technology is finally ready so that now with the 700 series were able to deliver that same experience so when you're scrolling through 

the oneplus Noord you won't actually be able to tell which platform you're on all the animations all the optimizations we've kind of taken from the 800 series and brought to the 700 series I'm sure that when they use it for the first time they won't really be able to tell what the that is it's not a 800 series chipset I think they'll be able to tell once they get into something really intensive like you know 3d game on a higher graphic setting but for the regular day-to-day tasks I've been using it as my daily driver for quite some time now you can't really tell so that's what it is like we finally feel like there's a opening for us to take our flagship experience into a new price category and we waited a little bit of time until we were finally ready to deliver this so I'm always wondering I'm always wondering 

how much how much parts cost in a phone so I was talking about this sort of formula for a budget phone one you end up at a 350 400 4 and $50 phone what sort of trade-offs like need to be made because they're simply too expensive so I have a couple questions maybe you can answer about that I'll try my best so generally about about how much does it cost to add NFC to a phone and I've seized one of those things we've seen left out of previous phones previous one plus loans for cost reasons now they're in many phones but still left out occasionally what is that little NFC tag cost yeah nowadays has become really common right so it's not something we thought of thought about a lot but it costs around four dollars to just add the enema see there and that's four bucks to you the the the manufacturer that's putting them in

the phones or four bucks to the end consumer to you okay it's it's um yeah when we think about a cup the cost of a smart phone we talk in terms of bum bo M it means building materials so the four dollars gets into the building materials and then we have other costs to deliver the phone to the consumer we have channel cost marketing costs operational costs offices staff etc so this is just the cost of components what about IP certification because that's not that's not a component necessarily it's a couple of seals and a couple of things you add to the phone that eventually qualify it for a certification so an ip68 rating in a phone

for example how much extra does that cost yeah so this is a really interesting topic and it's quite complicated so bear with me for a little bit there's no there's no official kind of body or third-party organization that certifies phones to be IP rated it's just a set of standards that are you know commonly agreed upon in the industry so take ip68 for instance for a phone to be able to claim that it's IP 68 certified it needs to survive 1.5 meters underwater sorry for North American it's not we were like talents or something for for 30 minutes 30 minutes okay 30 minutes so you mentioned the yeah we need to add additional seals to make sure that every port is waterproof but that's actually only a very small part of the additional cost the most of the cost here comes from the from the machines that we have to buy to test the devices so that's the biggest cost driver it's a big fixed investment to buy all these machines that allow us to test the devices through kind of blowing air into the ports to see if the air thing comes out it's not tested under water so that's the biggest fixed investment the second the cost driver is actually manpower so every every foam that's IP certified needs to undergo testing towards the end of the assembly line so at the end of the assembly line we have to add a few more steps to the process and this makes the phone take longer time to manufacture and we'll also need more manpower more people to undergo these tests so that's the second biggest cost driver the the seals of themselves they don't really cost a lot so 

how much do you save by not having all that obviously the machines divide out over you know the cost of units but I feel like if you just put the seals in and toss it under water and it seems to survive you're close even though you're not necessarily testing with official machines right so it really depends on the volume right so if you sell a lot of phones or you manufacture a lot of phones and you just divide the cost of machines by a lot of phones and hence driving the price down and also if your team is more experienced in building these assembly lines that have IP certification tests you can save time there as well to save costs for us it costs around fifteen dollars for each phone to do the IP certification so for the oneplus Nord we we chose to not do it and as you say we we can still build a phone that survives the day to day if you spilled some water on your phone if you if you drop it in the pool of water it still works so for for the oneplus Nord we just decided that this is not a place where we should put costs because we're looking at 

the overall user experience we're not designing for extreme use cases we're not designing to cover it kind of every corner of the user experience right so it may like previous Plus phones that weren't certified it may still have the seals and like you say it might still survive a spill or a rain or something like that but it doesn't necessarily go through the same extra steps in manufacturing and testing with those machines which saves a bit of money and therefore takes the price down a little bit so where the oneplus Nord at every stage of the product development process we make sure that the design can withstand 30 centimeters of water for 30 seconds and after after testing it in water we wait again so if the weight has increased there's actually water in the phone and only when there's no additional weight can it move on to 

the next development process there's another trade-off I guess I'm curious about which is battery and I think a lot of people don't really think about the different types of ways that you can build a battery experience usually we just think of how big is it what's the battery life and then that's the end but there is how fast it charges how fast it depletes how do you decide on a battery and a phone I think battery is is pretty standard but you messed you mentioned charging right and our phones have been known to have warp charging and that that has additional costs the hardware is not exactly the same because it's a high amperage charging the power conversion happens in the power brake instead of in the phone itself and that has a some additional cost yeah I mean shipping a phone with power brick pretty pretty important some may say oh pretty important yeah what about a what about the display so we've talked about I've talked about displays a lot I'm I'm always interested in a great screen what's the what's the difference between a great screen and a not-so-great screen when you're pricing out like something like a flagship versus a mid-range phone when it comes to display I think

 the the biggest choice you have to make is whether you're using a AMOLED display or a LCD display and an AMOLED display is up to two times more expensive than a LCD display but it it depends on a lot of other factors as well so for instance if you want a curved display that cost even more because when when you're manufacturing these curved displays there's more prone to error in the manufacturing process so the yield rate gets lower hence the more expensive product gotcha and as refresh rate seemed to come down in price a little bit every year like it was almost unusual to have a higher frustrate maybe four years ago and a phone now it seems like you can get a high refresh rate AMOLED display pretty readily when it comes to display it's a lot about volume so now that ninety Hertz displays have become really common that drives the volume up and then hence the price down but it chill still a trade-off because we spent quite a lot on the display for this phone to ensure the smoothness to ensure the smooth scrolling but we think it's worth it I got to ask I have to I'm sorry in advance but I have to ask how much does a headphone jack cost good question headphone jack doesn't cost that much in in in the Bill of Materials the the cost of that comes from the mechanical design of the phone the hardware design of the phone it takes additional space space you can otherwise use for other things for instance battery and nowadays true wireless earphones are getting pretty popular and they're coming down in price so we see a smaller and smaller in need for headphone jacks I'm actually curious how big of a difference do you think you 

actually gain in battery for example I think that's usually the sighted like biggest improvement once you get rid of that port how how much bigger do you actually get to make the battery in a phone by getting rid of the headphone jack it's a overall balance I think I would say I haven't really calculated how much you know that amount of space results in a milliamp Ridge for the battery but it's a balance of a lot of different things for instance we also want to make sure our phones are not too thick because one of the first things consumers react to is how it feels in the hand and when you have a phone that feels really slim or feels good in the hand so in our case we also you know since 

the very beginning we have these tapered edges on the back make it more grip level this is really important so it's an overall balance a larger battery or less space for the battery will also result in a thicker phone so I can just show you quickly some of the the prototypes we we explored before deciding on their final design so I have some of them here so how should I show them that's good so that's so this is like a when you say prototype this is like you make a sort of a mock-up of a potential design to fit the phone into yeah when I say prototype I mean design mock-ups so as I was saying before when the product team is kind of working on their product strategy the industrial design team is also working on different paths to take the design and so all the prototypes all the mock-ups are actually of they have the same camera kind of configuration you see a very unique style camera configuration but the finish is different here you see like three squares on the previous one it's a matte frosted glass and they're like are we yeah yeah which one of these two would you like the most I'm gonna I'm gonna go with that Dave to detail over there on the side I feel like I would I'll be into that so this one yeah teal yeah Dave to detail yeah but then towards the end we settled on this design so we did something you're usually not allowed to do which is we change design really late in the process and that caused the entire project to be delayed by around a month and the reason why we did this is because in the beginning we saw this new product line is more of a test or an experiment but as we were looking into the the data and the consumers we realized that this would be a really good opportunity that we would sell a lot more phones than we you know originally envisioned so then we had to really rethink our design strategy are we doing this as an experiment if it's an experiment then we can be much more daring with our industrial design we can try this camera setup that looks really unique l-shaped camera setup but if we want to sell a lot of phones we want to target a much broader user base we need to make sure that it's immediately recognizable as a 1 plus phone so we have the same you know camera setup vertical camera setup you see in other oneplus phones and we have the same kind of tapered edges on the on the back of the phone to really remind you of the oneplus design philosophy that reminds me of a question I've always had I am so curious about this so you yo

u how long before it's revealed is the design locked because I'm always I'm always thinking like sometimes phones get leaked and then you know there's all this this this feedback online suddenly of a phone that you haven't announced yet and you have maybe if it's early enough the ability to react to it but like you said once you started manufacturing and tooling and everything it's it's almost impossible to change it without delaying it massively so so how long before you get on stage with that final product is the design finished ideally we should finish it 9 months before the launch in this case it's it's gonna be six months yeah okay because um after we you know decide on the concept and we kick off there's a lot of other work we need to do right it's a cop it's a complex piece-by-piece process it has to fit sort of together like a puzzle otherwise our gonna be delayed because basically even if you have to finalize that design six to nine months before you end up getting into those stages of testing designs you've already thought of maybe like right after you've just you know revealed the phone a year before so that's it almost requires like a future it requires a vision of what you want in a future long before you're actually going to share it so that is exactly really interesting to note that's why it's really helpful to have a product strategy so when you're building a roadmap you make sure that you always follow this strategy that you build awesome well look I'm 

I appreciate the time and and all the info and background on how these phones come together I feel like I've learned a lot I'm hoping everyone who's listening has also learned a lot about how this stuff works but uh anything any closing words any final parting teasers for Nord you want to drop on us before we get out of here I'm really just really excited to see what everybody thinks