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A Few Words on Production Capacity Jun 20, 2014

Carl, Jun 20, 2014 :

Many friends have been yearning to learn more about our production to understand why it's currently so difficult to get the hands on the One.

The excitement for the One has grown a lot and reached a point where everything we say is speculated upon and sometimes misinterpreted. The best way for us to solve this is to get the device into the hands of as many as possible. We are doing everything in our power to increase our shipments. Before we do, nothing we say will be of much use to calm people down. But that won't stop us from trying to communicate.

Out of the many theories, some believe we are holding back on stock on purpose. This isn't true, and I'll explain why.

Before announcing the One on April 23, we didn't anticipate this type of demand. On the OnePlus One, the panel is (display and touch sensors) one of the most important components. The procurement cycle for this piece takes 3 months, which means that the order for the panels on the devices that we're currently sending out was made prior to our announcement.

As a startup, survival is a big concern. Sitting with excess inventory is something that can quickly kill us. Therefore, our initial sales estimations were conservative. We didn't expect the One to be such a popular device, and this has resulted in a shortage of stock. In the past weeks, we've done everything we can to cut down delivery times for upstream materials, while adjusting our order sizes. We're also exploring ways to increase our production yield.

Being very strict on quality had led to lower production yields. Using the display as an example, while already coming from one of the industry's top suppliers, the current pass rate is below 70%. This is a bottleneck to our capacity. Our back covers that are made of unique materials and finishes, are facing yield problems due to the complexity of their manufacturing. Also, 64GB memory is also a bit hard to get a hold of. 64GB tends not to be a very popular capacity, and most manufacturers do not order a lot of 64GB memory. Therefore, supply is relatively unstable.

Through joint efforts with our suppliers and partners, our production pace is planned to pick up starting next week. I'm aware that we have promised increased availability in late June. This is happening, just not as fast as the steady increase in demand that we've been seeing.

Our goal in the first few years is not to make money, but rather make a name for ourselves by delivering a great product to a lot of people. Our hope is that those users will be so happy with the One, they'll help us spread the word. Intentionally limiting production is the direct opposite of what we want to achieve.

Looking at our traffic stats for the past months, and then looking at how many devices we've delivered thus far, I can speak for the entire team when I say that we are quite stressed at the current state of affairs. We've also had our fair share of other hiccups along the way and are sincerely sorry that we couldn't get everything right on the first try. Despite our stumbles, many warm hearted fans have showed continued support.

We're thinking of what we can do to make up for the less than perfect experience for our early supporters. Please share your thoughts. All ideas will be considered.