Posts about manufacturers

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?