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Google is a smart company and Sundar Pichai is a smart man.

When Android One was first announced at Google I/O, I didn’t fully understand what the program did. New details have emerged in a BBC article, and I have to say, it’s genius.

I’ve consulted for an Indonesian company before interested in launching its own tablet. It was not an easy process. They had to meet many potential vendors in China, test an endless list of components and spend a lot of time haggling over price. Even then, prototypes were often disappointing from a price-to-performance ratio point of view. It was a huge management challenge, especially for a company whose strength is marketing and distribution.

The Android One program makes all that easy.

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Xiaomi and OnePlus proved that it is possible to start a successful smartphone company, even with limited resources. Here’s their strategy in a nutshell:

  1. Create a compelling product for tech enthusiasts
  2. Sell it direct as a loss leader
  3. Limit production to create scarcity
  4. Build awareness and demand
  5. Sell profitable related products and services
  6. Scale production once component costs drop

Small Chinese companies like Xiaomi and OnePlus were able to create markets even while competitors like Apple and Samsung spend billions in advertising their smartphones. Their success is a blueprint for others to follow, whether you’re running an established smartphone company or starting one.

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