Subscribing to gadgets

I wish I could preorder the new iPhone without having to worry about hype, wait, lines, and whether it’s in stock.

But here’s another idea, one I’m toying with for the book: What if I could subscribe to the iPhone as I subscribe to a magazine or newspaper? When the new edition is out, I get it. Perhaps one of the benefits of being a subscriber is that I’m guaranteed to get it before everyone else. Nya-nya. And unlike magazines, my old iPhone has value: I can trade it in like a car or sell it on eBay and in either case be assured that it will be used or will be disposed of properly. Apple can be guaranteed a loyal customer base for new products (saving on customer acquisition costs for them). These customers are also a built-in focus group; they can tell you what they want next. Publishers will tell you that subscriptions are also nice for cash flow. Meanwhile as a customer I can be assure I will always be up-to-the-minute. With technical and mechanical goods, I could also be assured of getting updates as I can get with software purchases: new software for the phone, a new radio for the car.

Perhaps the model here is not that I buy the gadgets. Maybe I lease them. This model is being pioneered, believe it or not, in office carpeting.

If the leasing/subscription model can work for carpeting and iPhones, what else could it work for? Clothes? Latter-day Johnny Cashes like Michael Rosenblum could get regular shipments of black shirts and pants. Computers? Sure but you don’t need to replace the whole box; you could send me a new hard drive when larger ones come out, stocked with new versions of my software. Kitchen cabinets? My wife is ready to replace ours.

Oh, I know you’ll argue that this defeats the planned obsolescence that is, admit it or not, at the heart of business models for manufacturers. But if we argue that in today’s ecology of links, relationships are more important than mass, loyalty is more valuable than turnover, and customer service is the new marketing, then there are new economics at work. Magazines try desperately to get you to auto-renew subscriptions through credit cards. Microsoft has been dying to switch to subscriptions for years. HP has long wanted to see you are low on ink via the internet and ship you new ink cartridges before you even know you need them. Why shouldn’t a brand built on loyalty like Apple be able to build a subscription business? Thoughts?

  • http://www.odmcast.com John Federico

    As a gadget geek, I love this idea.

    I first saw this concept proposed in Don Pepper’s and Martha Rogers’ groundbreaking book, “The One-to-One Future” except in their scenario they suggested “car subscriptions”, not gadgets.

    “Gadget subscriptions” are a more likely scenario as the logistics are more reasonable – it’s a lot easier to FedEx an iPhone than a Prius. ;)

    Regards,

    -jf.

    – 
    John Federico
    http://www.newrules.com

  • Roberto Bonanzinga

    Jeff:

    The idea is cool. I have seen it applied to hand bags, textbooks (www.chegg.com), cars (more as a private club).

    Of course do call me if you decide to start a company :)

    Ciao
    Roberto

  • http://www.subhub.com Evan Rudowski

    Jeff,

    Just to make sure I understand — you think it is a great idea to sell “subscriptions” to devices, or carpeting, or clothing. But you think it is a lousy idea to sell subscriptions to content.

    I must be missing something!

    Best wishes,
    Evan Rudowski

  • http://www.rosenblumtv.com Rosenblum

    Jeff
    the thing with the black T shirts and black pants is that the are never updated.
    I am still wearing black T shirt 1.0

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  • keith

    How about a subscription to your favorite band? You get the new single every time until you unsubscribe.

    Could I subscribe to Stephen King?

    I love the idea of subscribing to a gadget. I love my new Flip camera, and I might want a new one every time they improve this thing.

  • http://www.buzzmachine.com Jeff Jarvis

    Evan,

    Nice try. But I pay for iPhones. I don’t pay for content. Therefore, I don’t need a subscription to something I don’t pay for. (In the rare cases where I do pay — the Times in print, the Journal online — I do subscribe. And through RSS, I subscribe to many free sites. But that’s not a paid business model).

    Rosenblum,

    Don’t they ever wear out? And I’ve seen your black jackets. Very fashionable.

    Roberto,

    Do you have any links for the handbooks? And cars?

  • http://www.fromthefrontline.co.uk Graham

    You not seen this Jeff? “LINC is leased to the user as a service, not a product.”

    http://www.thegreenergrass.org/2008/02/linc-lifecycle-concept-phone.html

  • James

    I’ve seen other people wanting subscriptions to shoes in particular: finding a good pair of shoes is hard work, people don’t want to repeat that when – as inevitably happens – the pair you have isn’t being made any more when they wear out. But also for other useful but somewhat obscure gadgets (vertical keyboards for RSI sufferers is the first one that comes to mind) that aren’t world-changing but have a small group of people who find it essential. A subscription model could help with the problem that these sorts of products often get discontinued, which is a big pain for that group.

  • http://geoffjones.com Geoff

    Great idea, but I suspect phone companies gain more by ‘lock-in’ deals, like my iPhone is locked in for 18months so if I get the new one it will mean buying myself out of the contract and hence a tidy profit to O2.

  • http://www.tomnixon.co.uk Tom Nixon

    The Ford Options scheme was close to what you describe. Not sure if it still exists though. One thing I liked about it was that you could even upgrade to non-Ford cars if you wanted to. A very ’2.0′ style of openness :)

  • http://www.buzzmachine.com Jeff Jarvis

    Tom,

    I just looked up the Ford Options plan. It looks pretty much like a lease to me. What am I missing?
    Thanks

  • http://robertdfeinman.com/society robertdfeinman

    This model is already quite common in business. Office copiers were leased from the beginning which meant service and upgrades were a part of the deal.

    The same was true of mainframe computers, although the upgrade option was not so important since model changes happened infrequently.

    These days many firms “buy” PC’s in a deal that will swap them out every few years for new models. Microsoft is working hard to convince firms to subscribe to software rather than buy it. I think they are having mixed results.

    As many more people lease cars we see a transition away from the idea of ownership and the accumulation of assets to a pay-as-you-go lifestyle. This allows people to enjoy the products now even though they don’t have the savings to “buy” them. The result seems to be that people enter into old age with less accumulated capital to use during retirement. This has allowed the spending boom to continue and pushed the consequences into the future.

    Borrowing and renting have disguised the impoverishment of the working classes. I don’t think the long range results will be pleasant.

  • http://makethemaccountable.com Carolyn Kay

    There were such arrangements for leasing computer equipment back in the olden days before PCs and other gadgets came along.

    This idea could be applied to home computer and entertainment equipment, as well.

    Other ideas:

    Could include insurance for loss or theft.

    Could include storage of configuration information for each gadget, in case of loss.

    Carolyn Kay
    MakeThemAccountable.com

  • http://www.subhub.com Evan Rudowski

    Jeff,

    Thanks for the reply. With all due respect, I think there’s a flaw in your logic.

    You seem to argue that one can get content for free and that, therefore, the subscription model for content does not make sense. Why expect to be able to charge for content when there is adequate alternative content available for free?

    So let’s apply this logic to your iPhone example. There are plenty of mobile phones that can be had for free. I have a great one, the HTC Touch, that more than meets my needs. It’s included in my plan. You can have it for free too. Yet you want to pay for an iPhone. You might argue that the iPhone is more functional, or elegant, or fun — but from a utilitarian point of view I could probably show you how my free HTC Touch can do almost anything the paid iPhone can do.

    The point is that you want an iPhone because it appeals to you in certain ways and you feel it meets your needs better than any alternative. This may be true, or you may have been persuaded by good marketing.

    Phones are free. Yet this reality did not dissuade Apple from marketing a phone that one must pay for. Nor are you arguing that the model for paid phones is dead.

    The same can be said for content. You yourself pay for some content. Many other people are willing to pay for content that meets their needs in some way, or that has some brand cachet, even though there may be perfectly acceptable free alternatives.

    Yet Jeff Jarvis, a lifelong content guy, is willing to accept that there is a model for selling mobile phones, but is not willing to accept that the same reasoning can be applied to content and that the same methods can be used to persuade people to pay for content.

    Do you see the contradiction?

    Kind regards,
    Evan Rudowski

  • http://kawika.blogs.com Kawika Holbrook

    I’ve been “subscribing” to Apple products for years. As new laptops come out, I simply sell my old “subscription” on Craigslist or eBay and put the proceeds toward the new subscription.

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