The Vergecast - OnePlus' CEO Pete Lau doesn't think folding phones are good enough

Episode Date: January 14, 2020

At CES 2020, The Verge's Nilay Patel and Dieter Bohn sat down with OnePlus CEO Pete Lau in his first podcast appearance to talk about the OnePlus concept phone with a disappearing camera as well as his thoughts on newer technologies in the smartphone world, like 5G and folding phones. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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covering the biggest names and stories in sports and mom. And this is Am Mom, a community for athletes, game changers, and moms of all kinds. dropping May 14th. Tap in with us. Hey everybody, today on the Vergecast, we have One Plus CEO Pete Lowe. Pete sat down with us last week at the Consumer Electronics Show,

and by us, I mean myself, I'm Dieter Bone, and Nilai Patel, who usually hosts the interview show. He sat down right after he had unveiled a concept phone that he had made. It was a One Plus Concept One McLaren edition, and it had this special glass that was able to dynamically cover up the cameras if you wanted to. Just a concept, but still really interesting to talk about. We also talked about a bunch of other stuff.

We got into his feelings about folding phones and also 5G. It was a really fun conversation. And one thing I'll point out is that Pete is not a native English speaker, so he spoke to him through an interpreter. And he said it was his very first podcast ever, which, you know, made me feel really special. Anyway, great conversation. One of the first podcasts we're going to bring you from CES amongst a bunch more that are coming. So check it out.

Pete Lau, is the CEO of One Plus. Welcome. Thank you. And your interpreter, Eric Goss is here. Hello. Hey, everyone. Thank you. So you're probably going to be hearing more of Eric's voice.

But we're actually asking the questions to Pete. So we're going to start. And Dieter's here as well. Hey, how's it going? So Deeter, you've already played with the One Plus concept phone here at CES, and we've got a bunch of questions about it. But first, Pete, just tell us about it. Tell us about the glass in the back that changes tints

to hide the cameras. Why did you decide to make a phone like this? For One Plus, the one plus concept one represents a first bold exploration for us in terms of delivering a concept phone and for what the future form factor of a smartphone could look like. And what's particularly exciting about this is there's a electrochromic glass panel on the back that can hide the cameras. So the way that works is when charged, the electrochromic panel is opaque and the camera modules underneath, three of them in this case are hidden. And what this is exciting for is, in the future,

with the potential for more and more camera modules, and we've already seen some of this in the industry, added to a device, this technology has the potential for all those modules to be hidden and to create a very clean, uninterrupted design on the back of the smartphone device. We've seen that different players in the industry are trying to look at ways for the camera modules

to be organized or hidden. So this is something that's definitely on the minds of people in the industry. But what's exciting about it is, again, again, the camera modules are visible when they're in use and otherwise they can remain hidden. So is the point of the technology primarily about design or is there some other features that can offer the user? So for us delivering beautiful design in our products is at the core of what we try to do

and everything that we create and we see it as something that's very important in the eyes of users and something that we want to try to push towards the absolute limit and what One Plus creates. But what's exciting here is this isn't only a demonstration of potentially different design for a smartphone. There's the additional functionality addition of an indie filter within the smartphone device. And so that adds additional functionality in combination with distinct new design. And the ND filter right now is in the pro section of the camera app. Do you think that that is something that the mass consumer market needs to use as well? It's a great question, and it's been really interesting to see the response around it,

because it's larger than we would have expected. And I think with that, it will also bring an education to more and more potential users. So it will be something that more and more users find out about and then want to test out and see potentially play with. And for us, it also shows us that this is an area that we can focus further on in terms of refining and creating greater functionality within the division. Why did you choose to unveil this at the Consumer Electronics Show? This is a change for us.

It's a first time for us to create a concept of ice. And what we hope to do is to be able to show what we're working on and what we're exploring at an earlier stage and be able to show that to both media but also users. And the response is super valuable. We expected that and it's been probably even more than we could have thought. So that's something that we want to be able to continue doing. to continue doing. And that feedback, that information helps guide us in terms of delivering the most optimal user experience and value for users in what we might be exploring.

The reason I asked about CES is we see a lot of concepts at this show. And some of them are, someday we'll have flying cars and some of them are, we actually intend to make a product like this relatively soon. And I'm wondering on that spectrum, where is this phone land? For us, our approach and exploration is looking at features and functionality and an exploration that we hope can ultimately be efforts that can come to life and be beneficial for all consumers. So with this specifically, this technology, a lot of it has been in development for quite a while. and from a material perspective is close to a state of being ready for the market, but there's still a significant amount of testing and validation. That needs to be done on the overall device holistically and all of the hardware and software functionality together

to get it up to the standard that we want before we would launch it for consumers, in the case of the concept phone specifically. Is this going to come to a consumer phone? I believe it will. There's more like a yes. Yes. He definitely said yes. What's also awesome about this is there's been a lot of feedback of additional ideas

for what the functionality of the glass or the smartphone could be. So that gives us even more confidence and more excitement in trying to apply what we've been working on here into products that can go into the hands of consumers. So I asked for questions on Twitter. And we have some from the audience. It strikes me that this is branded with McLaren. And one of the questions ago was, why do smartphone companies and car companies co-brand products so much? What do both sides get out of that arrangement? In looking at this concept of device specifically in the partnership with McLaren,

the electrochromic glass actually comes from the inspiration of their car, the 720S, and its sunroof. And so when we had the idea of potentially applying this to the phone, that's something that was brought into discussions with them and able to hear their suggestions and feedback onto how or what it could mean for the smartphone device. And then the development happened on the one plus side. Did any engineers from McLaren help you develop this product? More for inspiration and input on overall design and application of materials, which did come from the engineering side. So then it was the engineering side hearing their recommendations per the glass material. and the leather material, which is also from the smartphone,

or sorry, from the car, and how that could be integrated into the device and then developed from the One Plus side. And what we see with this device is, in your hand, it feels very complete. It's very much a concept device that we've approached and trying to create something that looks and feels and is very complete.

And part of that is the input that they had on the application of the leather and then the hand stitching of the leather on the back. And the way that that then feels in the hand, distinctly different. This is a weird one. I heard you spent 18 months developing this. That's a big investment in R&D for what seems like a small feature. Are there other ideas that were left on the cutting room floor because they weren't worth 18 months of investment? Other other wacky ideas that you're like now we don't we don't need to

try that. For the R&D teams this is part of just their process of work. There are ideas exploration. Some are continued Some are put aside and maybe reconsidered. Some are just canceled and abandoned. And a good example of this is the 90-hertz refresh rate display on the 7 Pro. That's something that was brought to life with the launch in May of last year, but the actual research and development on that started three years ago. So a lot of time before the technology comes to market,

there's already research, exploration, and then eventually that new tech being brought to life. There are a couple of concepts, staying in the realm of concepts that other companies are doing. And I'm thinking specifically of folding phones. Do you think that that's silly? Do you think it's not ready yet? Foldable is actually an example of something that we have looked into but not pursued, as we were just asking about in the last question. And that's because in looking into the application of what's currently available for foldable screen technology,

we haven't found the significant advantage or value that's brought that isn't outweighed by the shortcomings or the disadvantages of the current state of the technology. What do you think has to change about the technology to change that ratio? One point to focus on here in response to the question, if you look at the fold and the current foldable technology devices, it's very large and not very clean or a very crisp fold. and that also currently results in a lot of screen creasing or issues with where the fold is in the screen. So this isn't something that I can accept in products that are built only when the technology is able to get to the level where that fold can be really crisp

and not impact the screen at where the fold happens is when it could be potentially usable or potentially applicable. I just want you to know if you're listening to this, Pete, Pete just fold straight up, folded a CS badge in half. Saying that with the curve at this side, you can't see it, but if it's not a very clean curve, then the fold, if the fold isn't clean, it can't be acceptable in what scene. Have you looked at some of the other strategies where instead of the big curve, the screen actually moves in and out? I think the Motorola razor, the screen actually moves. When you fold it, the screen actually pulls up so it can make that tighter fold. Is that something you consider? is different in that it's from, I guess, top to bottom versus left to right.

But what Pete's saying is that the fold is still not a clean crease to the degree that he would want and a product that he would make. So even though their application is slightly different, it's still facing that same challenge for the actual fold part. Including the screen material itself, because it's a plastic material, its ability to have the scratch resistance of glass just isn't there yet either. So it seems like for many years with One Plus, we've been talking about cameras. Obviously, every year more cameras get put on the flagship phones.

Are you thinking that you need to spend more time improving the core camera tech? You need to add more lenses. How is that competition shaping out as you compete with the flagship phones, but maintain your price advantage? For us, imaging is an area that we've focused very strongly on historically, and one that we're making very large investments into. not of the perspective that more cameras equals better, but I do see that camera functionality can potentially be improved by certain new camera technology that's integrated into the device,

which sometimes is requiring an additional camera sensor to be added. But, for example, five cameras on a device, I mean, Pete was questioning, like, I'm not sure if that's what makes sense right now. But definitely for a focus on software and camera algorithms, that's an area that we will continue focusing on for improvement. So the algorithm side, obviously computational photography, Google is doing its HDR, Apple's doing its HDR, they're spending a lot of money on the software side of how the camera works.

Is that something that you can compete with? Is it something that you have to make a different kind of investment in as you make the next generation of cameras? We will have our own approach. We definitely are very much taking a, approach of large investment into both camera team and the focus on software and algorithms. We have a large imaging team in Taipei and Taiwan. And more than that, we're working with partners who are the best of the best in terms of imaging and algorithms. And so from our perspective, not everything can be done to the absolute best just ourselves. We need to work

with the best in the industry. So that's how we're taking our own approach and taking our own approach with partnership to camera aspects like HTR, as you mentioned, and other functionality. So one of the reasons I asked is electrochromatic glass is expensive, camera sensors are expensive, developing your own algorithms with the big team in Taipei is expensive, but historically 1-plus has managed to be very, very price competitive. Prices are starting to creep up. Is there a ceiling of how expensive a flagship 1-plus phone would be? Do you think we'd ever see like a $1,000 one-plus phone?

The trend in the industry is that with more performance and more functionality for devices, it's increasing the prices for everyone. So for smartphones to continue increasing in prices, including ours, is definitely not out of the realm of impossibility. What we want to take as an approach is making sure that we create the best possible product for all users everywhere and still have what keeps One Plus unique in our sort of model of business that doesn't focus so much on traditional marketing or where companies might have traditionally very large expenditures. And that makes us more efficient. And those operational model advantages are then able to be passed on a savings to consumers at the end of the end of the day. Speaking of models, in the U.S., a lot of big phone makers hold themselves to one or two big phone releases a year. With the one plus seven, I think there's six versions.

depending on how you count it. There's the 7, the 7 Pro, the 7 Pro 5G, the 7T, the 7T Pro, and the 70 Pro 5G McLaren Edition. Why do you release so many different iterations of your phones? If we look at it actually from device skew count, we should be the very lowest in the whole industry. In 2019, though, we launched a pro line for the first time, which for One Plus is an exploration of,

the absolute possible limits of technology, and what that can bring for consumers in the pro products. That did add an additional skew or skews to our lineup. And in addition to that, 2019 is also a transitionary year of 4G to 5G, which also adds kind of a complication in additional skews of products. But that's something that every manufacturer has faced. So for every manufacturer that's released 5G products, it's added additional skews for the creation of those

products and their capabilities. Do you think you'll stick with, do you like the sort of number and then you have the T variant that comes a little bit later, that sort of TikTok strategy? Does that feel like the right cadence to you of releases? This can potentially change in the future, especially when we're looking at transition to 5G and our company growing and having more partners and more channels to work with. But what won't change is us always trying to deliver the very best and the very latest in what's available. That's at the principle of our approach in timing and in what's best fitting for the circumstances of the world and the market and the smart fund industry at the time. So that's what will remain consistent. Support for the show

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I've got a million questions. but two very popular questions from our audience in Twitter. Phylls are getting bigger, 5G phones keep getting bigger. Do you ever think about making another smaller phone? I think it has to go back to how we look at, I think we need to look at how small is defined. From my perspective, Pete saying it's the ability for the device to really fit in the hand and for the hand to really be able to wrap around it.

So the width of the device matters a lot there and can't go into details. but we can say that there will be an exploration from One Plus that we can all look forward to on this front. Will that exploration have a headphone jack? No. You don't need to translate that question. He was like, no, Eli, no, absolutely not.

I know it's just saying. And by far, the number one question people ask me on Twitter, well, it's two parts. Why no wireless charging in these phones? Because our quicksome too good. Because our wire charging is too good. Wow, bold. What we've been focused on is bringing fast wireless charging and that fast charging experience

to wireless. The issue to overcome, though, is the heat in that process. So that's very much what we've been focused on trying to create a solution for. I've tried 10-watt charging for wireless, and I can't get used to it. I feel like it's too slow, and it's just not worth it compared to plugging it into warp charge and that fast-charging experience. So it was a short answer and then a long answer. I just want to be clear.

Because the warp charging answer, this was the second part of my question. People like warp charging, they're into it, but they're asking, when will you support USBC PD? Because that's not supported on the phone right now. The big advantage of warp is that it's fast without creating a lot of heat on the device. So even under intensive circumstances like gaming, you can still game for hours and not have the issues of heat on the device. The compatibility of PD would create is significant heat. on the device, particularly under intensive circumstances like gaming. So that would be the drawback.

I'm not totally sure on all of the advantages and disadvantages to the compatibility and what it would mean in terms of increasing costs as well as the difficulty of making it happen. But it's something that we'll continue exploring. All right, now you've got to ask about five. Yeah, I was going to say. We're here. I ask everybody this question. We are often told 5G is a race.

Do you think it's a race? And if so, why is it a race? I don't see it as a race. I see 5G as a foundational technology and an inevitable transition for the industry, particularly for flagships. What happens if we come in second in the race? Is it something bad?

Second meaning... Well, if it's a race, someone comes in first. I ask everybody the same set of questions. No one tells us it's a race. But I'm always curious, if it is a race, what is the downside of coming in second? I see it as a critical part. of being a true flagship.

It's foundational and required. So I don't see it as a race. Even though we can be looked at as leading in 5G and coming to the market earliest or very early with products, I don't see it as a race. You guys have seen that we were the first of smartphones or among the first with the T-Mobile 600 megahertz low band 5G network.

It's very clear that you think it's not a race, but that you've won the most. That's what I'm getting out of. So the T-Mobile mid-band, that's their network. There's a lot of millimeter wave action in the world. I don't think anybody yet has both networks lit up and operating at the same time. There's certainly no phone. How do you think of those strategies of 5G in the future?

Are you going to be able to support them both soon? Are they going to be rivals? Are they going to complementary? I'm curious for your perspective. From my perspective, the long term, there has to be an integration of being able to support both. And that's best for consumers. How long will that take?

to say, I would say conservatively, three years, the phones, but the network. Three years before there's a phone that can support both millimeter wave and 600 meghertz. The smartphones will have the capability to support both more quickly, but for, it's hard to speak on behalf of the operators and their plans, but I see that that will take longer for them to have both integrated and lots of coverage. When you think about making the next generation of phones that can support both, you need radically different antenna designs for the two different systems. What challenges is that presented so far?

There's definitely challenges on the design front, and it brings in higher cost, but that will be able to come down over time. Okay, so I'm ending every interview by asking a question to CEOs in particular. It's something that I personally want to know, because I don't have a good answer for this. When do you work? When do you sit down and actually do work? When do you type on? your laptop and write emails, when do you find that time? Because you're very busy. Every CEO, everyone, by the way, starts laughing when I ask this question. I don't wake up particularly early. Usually between the range of eight to nine, but I end up going to bed late, usually 12

to 1 or maybe later. And I see myself as always available because we cover markets around the world that cover basically all time zones. So we're always online. Sometimes the U.S. team is waking me up at 2 a.m. for a meeting. That's the reality. So that's a lot of complicated problems to solve in areas around the world and markets that you serve. How are you organized to operate that way? How is one plus organized to serve all those markets and needs? For us, it goes back to a focus on making the best possible product and offering that to all markets.

What I believe in is that every market around the world has a consistency in wanting a great product. and great products can be applicable to all markets. I don't believe that great products have barriers in terms of country lines or geographies, so that's what it has to go back to. And Apple's a great example here. They have fans everywhere. So are you?

Our product positioning may be different, but there is very much parallels in terms of trying to create the best possible user experience that we can with whatever we do. Okay, I'm going to ask one more time. When do you sit down and do your email? I had more morning meetings than before, so I've gotten up a bit earlier to do email.

So around that 8 o'clock time frame, get some email done, and then I have the morning meetings. I hate this answer because it means I have to start doing that too. Every successful person is waking up early to do their email. I think, to me, it's the most fascinating question because everyone is different, but it seems like there's a consistency of answers. So what should 1 Plus fans be looking out over the next few months?

the last question. What should people be looking for for the next few months? I'm always focused on product, so I think people should be excited about what's coming in the future for product and the experiences that that product will bring. Great. Well, thank you so much. It was great having you. We'll talk to you soon. Thanks a lot. Thank you. Thanks again to One Plus CEO, Pete Lau, for doing his very first ever podcast with us. That makes me feel really special. Thanks especially to his interpreter Eric. And, you know, thanks to Neli for welcoming into his house. It was really nice to hang out on the interview. show for once. We're going to have a lot more interview shows this week. Neely came out to CES and spent the entire time talking to really interesting people about the products that they

announced and their plans for the rest of the year. So keep an eye out in the Vergecast's feed for all those interviews that are going to be coming over the next few weeks. But of course, the very next show you're going to listen to is the chat show, which is going to hit you on Friday.