Stuff as a Service
Would you subscribe to recyclable shower curtains? Or an iPad? Also: Foxtrot’s new loyalty program.
When Apple unveiled its new iPhones, Watches, and AirPods last month, one thing it didn’t introduce is a new way to purchase them.
The company has been working on a subscription service for iPhones and other hardware products, Bloomberg’s Mark Gurman reported earlier this year. After last month’s event, Gurman reiterated that he still expects the new model to launch sometime later this year or next year. It’s an interesting idea. But it hasn’t happened yet.
While subscription models have long been common for services, such as internet access, digital media, insurance, security monitoring, etc., they’re less popular as a method for purchasing physical products.
But it’s easy to see why they might be attractive over the long run for both merchant and consumer: There’s usually a lower barrier to entry than an upfront, one-time purchase. With recurring revenue, however, there’s a potentially much higher lifetime spend.
For example, you might be able to someday subscribe to an iPad Pro for, say, $50 to $100 per month, including access to a bunch of Apple services. That’s a lot less expensive to get started than buying one outright for $800 or more. But the expectation is that you’d continue paying that monthly fee indefinitely, with the opportunity to upgrade (or downgrade) every couple of years as new models are introduced.
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Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.
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